PBPB - Hot Stocks: WW surges on acquisition; PBPB climbs on preliminary results; ADTN OPI drop

2023-04-11 17:20:26 ET

With investors looking ahead to a key inflation report due out the following day, stocks put in a mixed performance on Tuesday. The Nasdaq slipped amid weakness in technology, while the Dow pushed higher for the fourth consecutive session. The S&P 500 ended just below the unchanged mark.

Looking at individual stocks, WW International ( NASDAQ: WW ) skyrocketed almost 60% after the company closed a key acquisition. Meanwhile, the release of strong preliminary results pushed Potbelly ( PBPB ) to a new 52-week high.

On the downside, ADTRAN Holdings ( ADTN ) lost nearly a quarter of its value after it issued preliminary financial figures. At the same time, Office Properties Income Trust ( OPI ) dropped to a new 52-week low on a merger deal.

Standout Gainer

WW International ( WW ) soared on news that the company has closed a deal to purchase subscription telehealth platform Sequence. Shares jumped 59%, as the transaction opens the door for a pharmaceutical-based clinical subscription service.

The owner of the Weight Watchers brand first announced the purchase of Sequence in March, news that sparked a nearly 80% one-day rally. The weight loss-focused telehealth platform provides a number of FDA-approved treatments.

"With this new service offering we expect a cohort of consumers to turn to it for help navigating what is poised to be an increasingly complex field of pharmaceutical solutions given its legacy brand equity/credibility in the weight management field and its ability to reach an extensive database of current (4M) and lapsed (20M) WW program users who have previously demonstrated a willingness to pay for help," Goldman Sachs analyst Jason English stated.

WW finished Tuesday's trading at $6.55, climbing $2.43 on the session. The surge took the stock back to levels last seen right after the deal was announced in early March.

However, shares remain well off a 52-week high of $11.03 set last year. Over a 12-month period, WW has fallen about 35%.

Standout Decliner

The release of weak preliminary results sent ADTRAN Holdings ( ADTN ) sharply lower, with the stock plummeting 24%.

The provider of networking and communications equipment reported Q1 preliminary revenue of $322M to $326M, below its prior guidance of $355M and $375M. The company blamed the weak performance on customer inventory corrections and supply constraints.

ADTN dropped $3.60 to close at $11.51. During the session, the stock also reached an intraday 52-week low of $10.62. Shares have fallen about 39% so far in 2023.

Notable New High

Potbelly ( PBPB ) received a boost from the release of preliminary Q1 results , which included better-than-expected adjusted EBITDA figures. As a result, shares of the fast food chain climbed 10% to set a new 52-week high.

PBPB said its Q1 adjusted EBITDA would total between $5.2M and $5.6M. Previously, the firm had projected a result of $4M to $5M. The company also gave a strong shop-store sales prediction, projecting growth between 22% and 22.3%.

Bolstered by the preliminary results, the stock rallied to an intraday 52-week high of $9.40. Shares moderated a bit before the close but still ended the day at $9.28, a rise of 88 cents on the session.

The advance added to gains posted earlier in the year, with the stock now up 69% since the end of 2022.

Notable New Low

Office Properties Income Trust ( OPI ) slumped to a new 52-week low, plunging 24% after the company agreed to acquire Diversified Healthcare Trust ( DHC ) in an all-stock deal.

Under the deal, OPI will exchange 0.147 of a share of its common stock for each share of DHC. The REIT, focused on leasing offices to single tenants and those with high credit scores, like government customers, said it expects the transaction to be immediately accretive to DHC shareholders on a pro rata basis.

On the news of the planned all-stock merger, OPI dropped to an intraday 52-week low of $8.46. The stock eventually finished at $8.73, falling $2.82 on the day.

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