One stock that has been struggling out of the gate in 2024 is WW International (WW 10.06%), better known as WeightWatchers. Already down more than 50% this year, it has been in a rapid free fall and could soon hit a new 52-week low.

What's behind this sharp sell-off, and is this a buying opportunity for investors or simply confirmation that the stock was overvalued?

Optimism was high for WW International last year

Investors were bullish on WW International last year after learning the company would acquire telehealth company Sequence, making it easier for patients to secure popular weight-loss drugs, including Wegovy and Ozempic.

As WeightWatchers jumped on the Ozempic bandwagon, investors were hopeful that would translate into more subscribers and better results. In December, the company even launched a program for people taking glucagon-like peptide 1 (GLP-1) drugs such as Ozempic. The program offers "tailored behavioral support" for people taking these drugs.

In effect, WeightWatchers bet big on the Ozempic trend with Sequence, and investors liked what they saw -- the stock soared 127% in 2023.

What went wrong for WW International stock?

On Jan. 4, Eli Lilly announced the launch of LillyDirect, an online platform that would make it easier for patients to gain access to weight-loss drugs via telehealth providers. The company makes a promising weight-loss drug, Zepbound, which has been even more effective than Ozempic in trials.

The news kicked off WW International stock's sell-off with an 11% decline that day. If patients can acquire weight-loss drugs directly from the pharmaceutical company through the new service, why deal with WW International at all?

Is WW International a broken business?

LillyDirect's announcement effectively cuts out middlemen like WW International for the growing number of consumers interested in weight-loss drugs. And that calls into question the growth potential of WW International's new telehealth offering.

In the third quarter, WW International's revenue was down 14% year over year, totaling $214.9 million. It did report a profit of $43.7 million, and its subscriber count at the end of the period increased 6% to 4.0 million.

But the big test will come in future earnings reports, which will show whether growth for clinical subscribers stalls. WW International serves these users through its Sequence program, and the company reported 45,000 clinical subscribers at the end of the third quarter, up 23% from the previous quarter.

WW International needs to report continued growth for this metric to give investors a reason to be optimistic as it's carrying more than $1.4 billion in long-term debt on its books and is becoming a riskier investment by the day.

Should you invest in WW International stock?

The company has reported over three years of declining revenue, and while it was profitable last quarter, investors shouldn't assume that will remain the case.

Given the fact WW International's key growth strategy now faces a major challenge, it wouldn't be surprising to see the stock fall further. Investors hunting for value stocks are better off looking elsewhere.