NutriSystem Inc  (NTRI) Trade Now »     Rate NTRI  -  Discuss NTRI  -  Add to Watch List        

Filed under: Analyst upgrades and downgrades, Good news, Technical Analysis, Stocks to Buy

NutriSystem (NASDAQ: NTRI) is a leading provider of weight management services. The company offers weight loss programs based on portion-controlled meals, individualized calorie plans, behavior modification and exercise. Customers order monthly food packages and receive free online/telephone counseling. The program has no membership fees. NutriSystem also owns and operates more than 100 Slim and Tone women's fitness centers. Competitors include Weight Watcher's International (NYSE: WTW) and eDiets.com

Aside from doing a tremendous job building a successful business from scratch, it appears you've also got to give NutriSystems (ntri) credit for knowing how to game the market.

Known for blowing past estimates, its shares took a hit two weeks ago after issuing first quarter guidance that wasn't quite what analysts had been expecting.

At the time the diet company said it would "update" guidance when it reported fourth quarter results, which it did last night. The stock leaped, in part, on investor enthusiasm that guidance that was revised even higher -- to a range of 88 cents to 92 cents, u

NutriSystem is down 40%+ since its December 2006 high of $75.20 and the analysts still hold their price targets. 

Kaufman compared NTRI to two separate sets of companies-ecommerce and diet-related-on an EV/ EBITDA basis. NTRI trades at EV/2007 EBITDA of 8.9x versus a 14.6x average for other ecommerce companies; diet companies trade at an average EV/2007 EBITDA of 10.3x, a 16% premium to NTRI, which has a better growth and margin profile. Even on a GAAP EPS basis, NTRI trades at a P/E multiple of 15x, while the diet company peer group is at a 19.5x multiple. Kaufman s price target is $85 an