The investors in WW International, Inc.'s (NASDAQ:WW) will be rubbing their hands together with glee today, after the share price leapt 34% to US$37.04 in the week following its quarterly results. Revenues of US$332m were in line with expectations, although statutory losses per share were US$0.26, some 12% smaller than was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on WW International after the latest results.

See our latest analysis for WW International

Taking into account the latest results, the current consensus from WW International's 13 analysts is for revenues of US$1.39b in 2021, which would reflect a reasonable 6.0% increase on its sales over the past 12 months. Per-share earnings are expected to soar 133% to US$2.15. Before this earnings report, the analysts had been forecasting revenues of US$1.38b and earnings per share (EPS) of US$1.77 in 2021. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$33.88, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on WW International, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$25.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that WW International's rate of growth is expected to accelerate meaningfully, with the forecast 8.1% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 4.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. So it's clear that despite the acceleration in growth, WW International is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around WW International's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for WW International going out to 2025, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 6 warning signs with WW International (at least 1 which is significant) , and understanding these should be part of your investment process.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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