WW International, Inc. plunges as Craig-Hallum says consumer interest 'down significantly'

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WW International, Inc. plunges as Craig-Hallum says consumer interest 'down significantly'
Credit: © Reuters.

WW International, Inc. (NASDAQ: WW ) shares plunged Thursday after Craig-Hallum analysts said consumer interest in traditional weight loss companies is "down significantly" compared to last year.

WW shares are currently trading 9% lower at $5.91 per share as of 13:05 pm ET on Thursday. Earlier in the session, the stock hit a low of $5.63 per share.

Analysts, who have a Hold rating and $8 price target on the stock, noted that key metrics like Google searches for weight loss-related topics had peaked earlier in January but are still elevated well above Q4 levels.

However, "some trends are starting to emerge, and it appears that consumer interest in traditional weight loss companies is down significantly compared to last year," wrote the analysts.

"In the first eight days of 2024, downloads of the WW and Noom apps on Android devices were down 43% y/y and 30% y/y, respectively, significantly worse than trends in late 2023," they added.

Craig-Hallum believes the decline in consumer interest is likely due to several factors that were already headwinds in 2023, such as increased competition from free apps and the continued impacts of high inflation. In addition, they note that cancellations for streaming media services have increased in recent months and "customers are likely also evaluating subscription weight loss products when considering which paid apps to cut."

"An additional factor that likely had negligible impact on prior Diet Seasons but has now reached critical mass is the rise of GLP-1 medications like Ozempic, which studies have shown to be far more effective for weight loss than any behavioral program based on diet and exercise alone," said the analysts, adding that all signs point to continued strong demand for GLP-1s.

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