.July 26, 2024 05:34:00 AM

WW International Inc (NASDAQ:WW) saw a 3% pre-market drop after Morgan Stanley downgraded the company to Equalweight and slashed the price target to $1.25 from $6.50. Analysts highlighted challenges in attracting new users, impacting subscriber growth and profitability. The core behavioral dieting app business is declining due to the rise of obesity medications, posing a long-term obstacle. However, the Clinical segment is growing rapidly, potentially offsetting core business declines. High debt adds to the risk profile, with a delicate balance between core business declines and Clinical segment growth. App downloads are down 16% year-over-year, while Clinical web traffic dropped 18% quarter-over-quarter.