Nutrisystem Analysis

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Nutrisystem, Inc. (NTRI)
Rating: BUY Price Target: $32 - 35
Market Cap: $786.64 M Stock Price: $26.14
Industry: Health & Wellness Date: May 9, 2016
Buy Side Report (CMAM Immersion)
Nutrisystem, Inc. (NTRI)
Rating: BUY Price Target: $32 - 35
Market Cap: $786.64 M Stock Price: $26.14
Industry: Health & Wellness Date: May 9, 2016
Buy Side Report (CMAM Immersion)

Contents
Investment Rationale 1
Company Profile and History 2
Company Products 3
Industry Overview 4
Competitive Position 6
Growth Factors 7
Valuation and Comparable Analysis 8
Investment Risks 9
Management Profile 10
Contact Information 11

Investment Rationale
TurnAround Opportunity
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Valuation
My $32 price target is derived from primarily a discounted cash flow analysis, but also confirmed with a relative comparison analysis. My price target implies a forward P/E of about 29.19x, which is slightly higher than the consensus estimate of 22.32. It also implies a forward EV/Revenues multiple of 1.6x, which is its historical multiple as well. The prospects for continued new customer growth and brand expansion (in addition to the recent acquisition of South Beach Diet) coupled with a debt-free balance sheet and improving free cash flow should allow for multiple expansions beyond the current consensus estimates.
Company Profile and History
Nutrisystem, Inc. (Nasdaq:GS: NTRI) is a provider of weight management products and services, including nutritionally balanced weight loss programs, multi-day kits available at retail locations and digital tools to support weight loss. It is the leading provider of home-delivered weight-loss meal plans in the United States. Typically, NTRI’s program customers purchase monthly food packages containing a four-week meal plan consisting of breakfasts, lunches, dinners and snacks and flex meal plan recipes, which they supplement with fresh fruits, vegetables and dairy. Most customers order on an auto-delivery basis, which means a four-week meal plan is sent on an ongoing basis, which is priced between $300.00 and $330.00 per shipment, until notified of a customer’s cancellation. NTRI offers pre-selected

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