WW International In Right Hands To Kindle Growth, Says Analyst

D.A. Davidson analyst Lind Bolton Weiser gave the shares of WW International Inc WW a Buy rating and a price target of $6.00.

The WW app’s Connect feature is outdated, and members have been recreating the experience on their own outside of Connect, the analyst writes.

The app’s one-sided communication method resembled twitter, and it should be more like Facebook, facilitating two-way communication.

The friendship principals that happen organically in in-person meetings need to be replicated on members’ phones; the closest bonds are formed when members’ groups are living right on their phones, added Bolton.

Going forward, management will implement program changes as soon as improvements are identified, rather than waiting to launch an entirely new program, said the analyst.

The Personal Points program launched in 4Q21 needed to be simplified.

After four months of analysis, CEO Sima Sistani and her team decided to change Personal Points; now all members have the same program, which is like a combination of the Blue plan under MyWW and the Freestyle plan.

The simplified program went live to existing members in mid-November, right after Thanksgiving, but it has not been as heavily advertised as a program innovation would be, the analyst added.

Bolton said after focusing more on the activation rate (a new KPI), the Y/Y decline in new members was smaller in 3Q22 than in 2Q22.

Sastani has correctly identified WW’s competitive advantage, which is the community and accountability of WW meetings.

She built Houseparty from zero to 150M users, so Bolton thinks she has the skillset to bring the meeting experience to the WW app.

New members are likely to still be down Y/Y through 2Q23, but the decline got smaller in 3Q22, an indicator that Sistani’s changes are starting to work, the analyst added.

Price Action: WW shares are trading higher by 0.67% at $3.75 on the last check Wednesday.