What Happened?
Shares of personal wellness company WeightWatchers (NASDAQ: WW) jumped 10.6% in the morning session after the company reported third-quarter 2025 financial results that surpassed revenue and adjusted profit expectations, despite a significant miss on bottom-line earnings.
While total revenue fell 10.8% year-over-year to $172.1 million, the figure still comfortably beat analyst estimates. However, the company reported a GAAP loss of $5.76 per share, which was substantially worse than Wall Street had anticipated. Despite the loss, investors appeared to focus on other positive aspects of the report. Specifically, WeightWatchers achieved an adjusted EBITDA of $42.78 million, which was well ahead of forecasts. Furthermore, management signaled confidence by slightly lifting its full-year guidance for revenue and providing an outlook for adjusted EBITDA that was above analyst estimates.
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What Is The Market Telling Us
WeightWatchers’s shares are very volatile and have had 27 moves greater than 5% over the last year. But moves this big are rare even for WeightWatchers and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 3.5% on the news that markets became increasingly wary of high valuations following a significant AI-driven rally.
The tech-heavy Nasdaq fell approximately 1.4% as a wave of caution swept through the market. A key example of this trend is Palantir Technologies, which saw its shares drop around 7% despite reporting record quarterly results that surpassed analyst estimates and raising its full-year revenue outlook. This seemingly contradictory movement highlighted a broader sentiment shift. Investors appeared to be engaging in profit-taking, concerned that the recent surge in AI-related stocks had led to stretched valuations. This broader market caution affected high-growth technology companies that had previously surged on AI optimism but faced increased scrutiny, signaling a potential cooling-off period for the sector.
Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.
WeightWatchers is up 41.5% since the beginning of the year, but at $38.21 per share, it is still trading 14.9% below its 52-week high of $44.89 from August 2025. Investors who bought $1,000 worth of WeightWatchers’s shares at the IPO in June 2025 would now be looking at an investment worth $1,415.
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