WW has seen a surge in digital subscriptions on a year-over-year basis
The shares of Weight Watchers parent WW International Inc (NASDAQ:WW) are up 16.3% at $29.41 at last check, soaring after the company announced that digital subscriptions increased due to social distancing amid coronavirus. As of June 6, subscribers totaled 4.9 million -- a 7% increase year-over-year. The company will also be opening 400 studios in the U.S. by June 30. Following the news, D.A. Davidson and UBS hiked up their price targets to $39 and $28, respectively.
Today's pop has WW gapping above former resistance at the 320-day moving average, a trendline that has been keeping a cap on gains at the $28 mark. Now above that level for the first time since early March, WW is up 139.5% in the last three months, though still down 23% for 2020.
Analysts are split on WW, with seven out of 12 sporting a "buy" or better rating, four a tepid "hold," and one carrying a "sell." Meanwhile, the 12-month consensus price target of $30.81 is a 7% premium to current levels.
In the options pits, calls are quadrupling puts, as WW holds a 10-day call/put volume ratio of 4.51 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 86th percentile of its annual range, meaning this penchant for calls is higher than usual.
Options also looks like an affordable way to go when weighing in on the stock. WW's Schaeffer's Volatility Index (SVI) of 77% stands higher than just 19% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment.