WW International (WW) reported Q1 results that were "largely" in line with expectations, with strong revenue per subscriber and momentum in its "Core+" offering supporting confidence in its fiscal 2026 outlook, Morgan Stanley said in a report Friday.

Q1 revenue exceeded analysts' estimate by 5%, driven by a 12% sequential increase in Clinic spending per subscriber and a 3% rise in behavioral spending per subscriber. The stronger revenue trends increased confidence that WW could outperform its revenue guidance through the remainder of the year, while the company maintained its fiscal 2026 guidance, according to the report.

The investment bank said one of the most "encouraging" developments in the quarter was debt paydown. However, "liquidity concerns" remain a key investor focus as the company's term loan has fallen sharply below par this year.

Morgan Stanley maintained an equal-weight rating on WW International and lowered its price target to $20 from $21, citing a base case wide valuation range of $5 to $35 as the "business evolution" continues.

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