Weight Watchers Stock Is Providing A Pullback Opportunity

On Aug. 10, 2021, Weight Watchers released its second-quarter fiscal 2021 results for the quarter ending June 2021. The Company reported GAAP earnings-per-share (EPS) profit of $0.12 excluding non-recurring items versus consensus analyst estimates for $0.67, a (-$0.55) miss. Revenues fell (-6.7%) year-over-year (YoY) to $311.4 million, falling short of consensus analyst estimates for $338.09 million. Digital subscribers grew 6% YoY. Weight Watchers CEO Mindy Grossman commented:

“We ended the quarter with 4.9 million subscribers, including 4.1 million Digital subscribers — an all-time second quarter-end high and up 6% year-over-year, but below our expectations. The strong Digital year-over-year growth momentum in Q1 slowed in the second quarter as we cycled against strong Digital performance in 2020,” said Mindy Grossman, the Company’s President and CEO:

The Company issued full year 2021 GAAP EPS to range between $1.10 to $1.25 compared to $2.11 consensus analyst estimates. The Company sees full-year 2021 revenues coming in between $1.30 billion compared to $1.39 billion analyst estimates. Amy O’Keefe, the Company’s CFO, said, “Subscriber trends in Q2 followed a more typical seasonal pattern than we expected, and our guidance reflects this trend. Our gross margin performance remains strong and reflective of the ongoing benefits of our flexible, subscription-based digital model.”

CEO Grossman set the tone:

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for WW stock. The weekly rifle chart collapsed on the Q2 2021 earnings release as shares peaked around the $33.08 Fibonacci (fib) level before the plunge. The weekly rifle chart has a downtrend with a falling 5-period MA at $29.17 with lower weekly Bollinger Bands (BBs) at $21.60. The weekly market structure low (MSL) buy triggered initially triggered on the breakout through $27.50. The breakdown under $35.14 triggered a weekly market structure high (MSH) sell signal. The weekly stochastic mini inverse pup oscillation is falling towards the 20-band. The daily rifle chart gapped down on the earnings plummet. The daily 5-period MA is falling at $26.91 with lower daily BBs at $22.98. The daily stochastic abruptly crossed down for an oscillation towards the 20-band as well. Prudent investors can monitor for opportunistic pullback price levels at the $22.44 fib, $20.99 fib, $19.96, $17.59 fib, and the $16.41 fib. Upside trajectories range from $27.69 fib up to the $38.56 fib level.

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