Weight Watchers International Inc.WTW

Morningstar Rating

Stock Research and Analysis

by Warren Miller

Weight Watchers has a reputable and differentiated product in an industry that is rife with false claims. The company benefits from a wide moat because it would be extremely difficult for a competitor to replicate the company's brand recognition and Read more

Bulls Say

Weight Watchers has begun to monetize its brand reputation further by licensing its name and nutritional ratings to reputable food producers and restaurants.

There is little support-based competition that Weight Watchers faces in the weight-management industry.

Weight Watchers' capital-light business model should allow the company to earn returns on invested capital significantly in excess of its cost of capital for years to come. Read more

Bears Say

Weight Watchers' use of financial leverage could be cause for concern if the credit environment weakens.

Diet fads can significantly, but temporarily, erode cash flows as consumers flock to trendy weight-loss programs in the short term.

For most people, weight-management services are discretionary expenditures, leaving Weight Watchers exposed to downturns in consumer incomes and spending habits. Read more

Strategy

Weight Watchers is broadening its subscriber base in several ways. The company is trying to overcome its traditional female-oriented reputation by offering more male-oriented products and services, which Read more

Management

David Kirchoff has been the CEO of Weight Watchers since December 2006. He has served the company in several capacities, including CFO and COO of Europe and Asia, for several years. We believe he and his management team have adequate experience to capably Read more

Profile

Weight Watchers is a leading weight-management company with operations in more than 25 countries. Consumers bought $4 billion of Weight Watchers-branded products in 2008, Read more

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