What: Shares of Weight Watchers International (NASDAQ:WTW) were up more than 17% as of 3:00 p.m. ET Friday after the company issued a press release highlighting an encouraging academic study featuring its program.
So what: Specifically, Weight Watchers lauded a new randomized controlled study conducted by researchers at the Indiana State University School of Medicine, which found "adults with prediabetes who followed a nationally available weight management program with a prediabetes-specific component, Weight Watchers, lost significantly more weight and experienced better blood glucose control than those following a self-initiated program using supplemental counseling materials."
According to the study, participants following the prediabetes-specific Weight Watchers program lost 5.5% of their body weight at six months, on average, and fully maintained that loss at 12 months. Meanwhile, the control group lost just 0.8% of their body weight at six months, then regained some of that weight for a total loss of 0.2% at 12 months. That meant intervention participants lost an average of 10.14 more pounds at six months, and 11.68 more pounds one year following the start of the study.
Now what: From an outsider's perspective, I'll admit it seems strange such validation should be required to prop up Weight Watchers' stock price in the first place. But shares have been especially volatile as the company works to turn itself around. And today's pop follows a brutal 40%-plus drop in the month of January, caused both by the broader market's decline and as initial excitement waned after Oprah endorsed and took a major stake in Weight Watchers late last year.
As it stands, investors will get a better idea of whether the turnaround is progressing as planned when Weight Watchers announces fourth-quarter and full-year 2015 results next Thursday, Feb. 25, 2016. In the meantime, I remain content watching Weight Watchers stock from the sidelines.