What Happened?

Shares of personal wellness company WeightWatchers (NASDAQ:WW) jumped 54.1% in the morning session on continued positive momentum after the company expanded its clinical weight management offerings by introducing compounded semaglutide. Semaglutide (a GLP-1 medication) is expected to provide a more accessible and affordable alternative to medications like Ozempic and Wegovy, given ongoing shortages.

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What The Market Is Telling Us

WeightWatchers’s shares are extremely volatile and have had 96 moves greater than 5% over the last year. But moves this big are rare even for WeightWatchers and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 27.7% on the news that the company reported fourth-quarter results with its gross margin, operating margin, and EPS falling short of Wall Street's expectations. Free cash flow also turned negative as it failed to sustain the positive cash flow recorded in the previous quarter. Furthermore, WW's full-year revenue and operating income guidance missed analysts' estimates as the company decided to wind down its low-margin consumer products business. Overall, this was a bad quarter for WW.

WeightWatchers is down 81.1% since the beginning of the year, and at $1.62 per share, it is trading 87.7% below its 52-week high of $13.21 from October 2023. Investors who bought $1,000 worth of WeightWatchers’s shares 5 years ago would now be looking at an investment worth $44.99.

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