Pras

Is NutriSystem Healthy At $30/Share?

Read the Article on BBC
news.bbc.co.uk/2/hi/he......

It says Canada has the worst of the obesity problems in countries except the US. NTRI is going to Canada. Another big market.

Another note about Alli. There have been 2 million customers taking/have taken Alli since launch. It only caused a dent of 30K (12%) customers for NTRI during the period. GSK approximates around 2 Million customer for Alli for the whole year going forward. That means a 12% / 4 = 3% (4 quarters) reduction for NTRI, which is not as alarming as people here sound to be.

Also note that because of this drop of the customers (from an expectation of 250K to 215K) the CAC went up from 180 expected, to 210. Maths is
$180 * (250K/215K) = $209.

So there is not a whole lot of surprise with this high CAC. Alli caused only a drop of 14% customers in their launch period. I think the effect is only going to abate going forward. On different note I alos think that the customer base for Alli and NTRI is not totally inclusive of the either.

Still holding on to hope that the ER confirms my hypothesis, and the street appreciates it.