Will WW International Stock Recover After Falling 10% Over The Last Week?

by Trefis Team
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Weight Watchers International
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WW International stock (NASDAQ: WW) declined by about 10% over the last week (five trading days) and currently trades at about $33 per share. Although there doesn’t appear to be too much news specific to the company over the last few days, there are a couple of other factors that likely drove the sell-off. Firstly, WW stock has rallied by a solid 40% year-to-date, as the company is viewed as a key play on the post-Covid reopening, and it’s possible that investors are booking some profits. Separately, there have been reports that WW’s rival Noom, a popular app-based weight management player, intends to go public around early 2022 and has apparently hired Goldman Sachs to lead its preparations. This could have weighed on WW stock as well.

So will WW International stock continue to trend lower over the coming weeks and months, or is a rally looking more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, returns for WW International stock remain roughly flat in the next month (21 trading days) after experiencing a 10% decline over the last five trading days. The stock is also likely to underperform the S&P 500 over the next month, with an expected return that would be -1.7% lower compared to the S&P 500.

But how would these numbers change if you are interested in holding WW International stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test WW International stock chances of a rise after a fall and vice-versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF WW stock moved by -5% over 5 trading days, THEN over the next 21 trading days, then WW stock moves an average of 1.8%, with a 49.2% probability of a positive return over this period

Also, given a -5% movement for the stock over 5 trading days, it has historically witnessed an excess return of 0.5% compared to the S&P500 over the next 21 trading days, with a 44.1% percent probability of a positive excess return

Some Fun Scenarios, FAQs & Making Sense of WW Stock Movements:

Question 1: Is the average return for WW stock higher after a drop?

Answer:

Consider two situations,

Case 1: Weight Watchers International Inc stock drops by -5% or more in a week

Case 2: Weight Watchers International Inc stock rises by 5% or more in a week

Is the average return for Weight Watchers International Inc stock higher over the subsequent month after Case 1 or Case 2?

WW stock fares better after Case 2, with an average return of 1.8% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 5.4% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Weight Watchers International Inc stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Weight Watchers International Inc stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For WW stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although WW stock appears to be an exception to this general observation.

WW’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Weight Watchers International Inc stock by changing the inputs in the charts above.

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