NEW YORK (TheStreet) -- Weight Watchers International (WTW) - Get Weight Watchers International, Inc. Report stock continues to rise, up 3.69% to $18.78 on heavy trading volume on Tuesday, after the company launched its new advertising campaign featuring media mogul Oprah Winfrey.
In October, Winfrey took a 10% stake in the company, which sent shares soaring.
"If not now, when? I feel that way and I know that millions of other people feel that way," Winfrey said in the advertisement. "Are you ready? Let's do this together."
Earlier this month, the New York City-based company launched a new program that shifts its focus to health and wellness rather than weight loss.
The advertising campaign is part of Weight Watchers' effort to recruit younger members, the Wall Street Journal reports.
"The challenge with Weight Watchers is they've tried so many campaigns over the years, to some extent it may not be a question of advertising and more about the relevance of the product," Allen Adamson, a branding expert, told the Journal.
So far today, 3.47 million shares of Weight Watchers have traded, versus its 30-day average of 2.41 million shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate WEIGHT WATCHERS INTL INC as a Sell with a ratings score of D+. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WEIGHT WATCHERS INTL INC's earnings per share declined by 43.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WEIGHT WATCHERS INTL INC reported lower earnings of $1.74 versus $3.63 in the prior year. For the next year, the market is expecting a contraction of 57.5% in earnings ($0.74 versus $1.74).
- Net operating cash flow has significantly decreased to $26.57 million or 64.93% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 43.28% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Diversified Consumer Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 42.5% when compared to the same quarter one year ago, falling from $37.89 million to $21.79 million.
- The revenue fell significantly faster than the industry average of 13.3%. Since the same quarter one year prior, revenues fell by 20.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: WTW