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Are Investors Undervaluing Weight Watchers International (WW) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Weight Watchers International (WW - Free Report) . WW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 14 right now. For comparison, its industry sports an average P/E of 15.30. Over the past 52 weeks, WW's Forward P/E has been as high as 27.72 and as low as 5.58, with a median of 13.93.

We also note that WW holds a PEG ratio of 1.12. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WW's industry has an average PEG of 1.26 right now. WW's PEG has been as high as 1.58 and as low as 0.24, with a median of 0.88, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Weight Watchers International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WW feels like a great value stock at the moment.


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