Goldman is Bullish on Oprah-Backed WW (Formerly WeightWatchers)
Stocks
April 11, 2023
🚨 Volatility alert — not for the easily rattled.
WW International (formerly WeightWatchers) provides subscriptions with meal plans and tools to lose weight.
Last month, they jumped on the fast-growing weight-loss drug train, leading Goldman to raise $WW’s target price to $13 (100% upside) yesterday.
Investors may know WW for two reasons:
- Oprah’s 2015 partnership and investment of $43M — which sent $WW up nearly 1,500% in the following three years.
- WeightWatchers’ 2018 rebrand to WW — which confused the sh*t outta members and led to WW falling over 90% since.
Pivoting to wellness
It was all part of a cultural shift from dieting to health and wellness — terms that blurred over the years and have created a $1.5T industry.
But WW’s rebrand was poorly executed as memberships began dropping — and not even Oprah was able to bring it back.
How did the rebrand play out? Almost as bad as “New Coke”…
- WW’s 2022 sales were nearly 50% lower than its WeightWatchers days.
- After years of profitability, WW flipped to a loss in 2022 — burning $250M on $1B of revenue.
In 2022, WW brought in a new CEO Sima Sistani — taking the focus back to weight loss.
Pivoting back to weight loss
Last month, WW acquired telehealth startup Sequence for $132M — briefly sending $WW up 90% before collapsing. It’s a play on the rapidly growing weight-loss drug market:
- Since 2021, the FDA has approved a series of highly effective weight-loss drugs for chronic weight-loss management.
- It’s led to a major shortage in these drugs — which Sistani calls “the biggest innovation in our industry today.”
And that’s where Sequence comes in — connecting patients with doctors who can prescribe weight-loss drugs. WW’s future now hinges on weight loss once again.
Read more: Are weight-loss treatments the blockbuster drugs of the decade?
