(Bloomberg) -- WW International Inc. suffered its worst month on record in January, erasing the wellness company’s advance since it said in March that it was entering the growing market for a new class of weight-loss drugs. 

WW, better known as WeightWatchers, slumped 6.1% on Wednesday, bringing its decline for the month to 57% amid emerging competition and concern around subscriber growth. The latest drop came as part of a broad market slide Wednesday after Federal Reserve Chair Jerome Powell signaled officials aren’t rushing to cut interest rates.

The performance is a stark reversal from 2023. The stock notched its biggest one-day gain since 2015 on March 7 after WW struck a deal for telehealth obesity-drug provider Sequence. Enthusiasm around the acquisition and its potential to turn around WW’s business drove the shares up 127% last year.

Read more: WeightWatchers Gambles Its Business on Trendy Obesity Drugs

A key driver of the January weakness came early in the month when Eli Lilly and Co. launched an initiative to sell weight-loss drugs directly to the public, threatening a key growth area for WW. 

Some Wall Street analysts are worried about potential signs of waning demand for WW subscriptions.

At Craig-Hallum Capital Group LLC, analyst Alex Fuhrman warned this week that consumer interest in traditional weight-loss companies is “down significantly” from last year. Downloads of the WW app on Android devices and web traffic for the company have declined in early 2024, Fuhrman said in a research note. He flagged similarly weak trends for weight-loss startup Noom Inc.

To be sure, D.A. Davidson & Co.’s Linda Bolton Weiser said WW cautioned in December that third-party data could be noisy due to the integration of Sequence into its app.

“Investors are very spooked about the app download data,” she said. “The trend appears to have changed, but on the other hand, the data may be skewed.” 

She said WW’s subscriber update with fourth-quarter earnings in March will clarify whether the app download data accurately represents recent trends.

“In the long-term, WeightWatchers is still well-positioned to be somebody that will gain major market share in the space,” she said. “They have brand equity, whereas nobody else really does in the weight-loss space.”

WW has four buy ratings, three holds and one sell among analysts tracked by Bloomberg. The average analyst price target of $11 implies roughly 191% return potential over the next 12 months.

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