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Weight Watchers (NYSE:WTW) insiders must have dreaded earnings release dates over the last year. Each quarter, the stock has seen a drop of at least 15% after earnings releases. But this is poised to change. Maybe thinking this change will make itself apparent in the next quarter is naive, but I argue it should begin at least sometime this year, and here's why:

Weight Watchers has been ranked the #1 diet by US News and has a long history of success among dieters. It is one of the most proven dieting programs, and the company has been around for over 40 years.

The problems at Weight Watchers stem from the company not fully capitalizing on the market for weight loss. Charging for services that other companies, primarily other smartphone app companies, are offering for free, has put Weight Watchers at a disadvantage. The lack of enthusiasm for the status quo at Weight Watchers was once again displayed on their earnings day, when the company reported only $0.54 in EPS and missing estimates by 10%. FY 2014 guidance from the company has yearly EPS coming in at somewhere between $1.30 and $1.60, greatly missing the expectations of $2.72. Setting the bar this low presents a great opportunity for Weight Watchers to spike on any surprises.

The new Simple Start program featuring Jessica Simpson, which makes it easier for new enrollees to start their dieting process, has shown Weight Watchers' desire to make their program more popular. The company recently begun marketing to men specifically, another indication of their efforts to reach more of the market place. Now all they need to do is keep on innovating. With the percentage of the population that is overweight or obese steadily increasing, the market for weight loss is poised to grow as well.

Despite declines in meeting attendance, Weight Watchers was still able to beat revenue estimates by $10M. Of course, this was overshadowed by other earnings data, yet it highlights the strength in the backbone of Weight Watchers' core business structure.

Placing James Chambers in as new CEO after Q2 earnings were released in 2013 has positioned Weight Watchers to make a strong comeback. New efforts to increase enrollment and show the world how Weight Watchers is different and better should start having an impact on revenue and popularity over the next few quarters. Declines in usage of products like Weight Watchers' app and meetings has been explained partially by consumers shifting to trials of free services; however, I propose that this effect is likely to wane significantly as trial periods are over for consumers using other products. Many products are likely to remain free, but, as with many apps, the end of trial periods will leave users with limitations on usage.

I acknowledge that many of the metrics of Weight Watchers might predict more pessimistic future for the company. Quarterly growth coming in at -10.3% doesn't sound very enticing, but a look at the company's PEG shows how much of a bargain the shares really are. With a PEG of -0.55, Weight Watchers is a great buy. It doesn't look to be a quick profit maker, but long-term, the sky is the limit for Weight Watchers.

Just look at Nutrisystem, Inc. (NASDAQ:NTRI). Though more gradual than Weight Watchers, Nutrisystem experienced a similar decline in share price over the last 5 years, only to see nearly a 300% rebound in the share price. Part of the foundation of Nutrisystem in and of itself makes an argument for Weight Watchers by stating the clear advantage paid programs have over free apps--they focus on portion control, not just basic calories and exercise. Of course Nutrisystem represents a competitor to Weight Watchers, but with a PEG of 3.01, Nutrisystem is becoming more and more overvalued.

Moving forward, I will look for Weight Watchers to begin capitalizing on the weight loss market through continuing to find innovative ways to bring in new business. The numbers are certainly there for them, and when they take advantage of that, profits will be there for the reaping.

Source: Weight Watchers Finally Nearing Its Goal Weight