Medifast (MED) AI Stock Analysis

• Market Cap: $155.65M
• Dividend Yield: N/A
• Average Volume (3M): 225.11K
• Price to Earnings (P/E): 75.2
• Beta (1Y): 0.41
• Revenue Growth: -43.80%
• EPS Growth: -97.89%
• Country: US
• Employees: 634
• Sector: Consumer Cyclical
• Sector Strength: 53
• Industry: Personal Services
• EPS (TTM): 0.19
• Shares Outstanding: 10,937,830
• 10 Day Avg. Volume: 277,954
• 30 Day Avg. Volume: 225,110
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.25
• Price to Cash Flow (P/CF): -7.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $16.50
• Price Target Upside: 15.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Medifast's overall stock score reflects a company grappling with significant challenges in reversing revenue and profit declines. The strong balance sheet provides some reassurance, but high P/E valuation and bearish technical indicators weigh heavily. While cost-saving measures and new product launches are positives, the ongoing decline in coach productivity and customer acquisition issues must be addressed for a more favorable outlook.

Medifast Business Overview & Revenue Model

Company Description

Medifast, Inc. is a health and wellness company that specializes in weight loss and healthy living products. The company operates primarily through its OPTAVIA brand, which offers a range of meal replacement products, dietary supplements, and health coaching services. Medifast's mission is to help individuals achieve optimal health and wellness through a comprehensive and scientifically backed approach. The company is headquartered in Baltimore, Maryland, and serves a broad customer base in the United States and internationally.

How the Company Makes Money

Medifast generates revenue primarily through the sale of its OPTAVIA-branded products, which include meal replacements such as shakes, bars, and snacks, as well as dietary supplements designed to support weight loss and overall health. The company employs a direct sales model, leveraging a network of independent OPTAVIA Coaches who provide personalized support and guidance to clients. These coaches earn commissions based on their sales, which incentivizes product promotion and customer acquisition. Additionally, Medifast benefits from a recurring revenue stream as customers typically purchase products on a subscription basis to maintain their weight loss and health goals. Key factors contributing to Medifast's earnings include its effective marketing strategies, the quality and efficacy of its products, and the strength of its coaching network, which fosters a community-oriented approach to health and wellness.

Medifast Financial Statement Overview

Summary

Medifast's financial performance reflects challenges in revenue and profitability, with notable declines in income statement metrics. However, the balance sheet remains strong, characterized by low leverage and high equity, providing a cushion against financial volatility. Cash flow generation, while diminished, remains positive and supports operational needs. Overall, the company displays resilience but faces headwinds in reversing its revenue and profit declines.

Income Statement

Medifast's income statement reveals a significant decrease in revenue for the most recent annual period, which is concerning. The gross profit margin remains healthy at approximately 73.8%, but net profit margin has decreased to about 0.35%, indicating pressure on net income. The EBIT and EBITDA margins have also contracted considerably. Despite these challenges, the company maintained positive net income, showcasing resilience in a difficult environment.

Balance Sheet

Medifast's balance sheet is strong with a low debt-to-equity ratio of approximately 0.08, indicating low leverage and financial stability. The equity ratio is robust at about 73.9%, suggesting a highly capitalized structure. Return on equity, however, has decreased to 1%, reflecting reduced profitability. Overall, the balance sheet shows a solid financial foundation with ample equity and minimal debt.

Cash Flow

The cash flow statement highlights a decline in free cash flow compared to prior periods, but it remains positive at $17.02 million. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net earnings. The decrease in free cash flow growth rate is a concern, yet operating cash flow continues to support ongoing operations effectively.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
602.46M	1.07B	1.60B	1.53B	934.84M
	Gross Profit
444.62M	775.85M	1.14B	1.13B	697.82M
	EBIT
2.88M	126.40M	184.81M	216.24M	134.16M
	EBITDA
2.88M	139.51M	201.84M	223.05M	134.16M
	Net Income Common Stockholders
2.09M	99.42M	143.57M	164.03M	102.86M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.93M	150.04M	87.69M	109.54M	174.47M
	Total Assets
284.21M	309.91M	316.21M	398.33M	276.08M
	Total Debt
16.13M	22.01M	26.05M	32.54M	11.16M
	Net Debt
-74.80M	-72.43M	-61.64M	-71.64M	-152.56M
	Total Liabilities
74.10M	108.43M	161.17M	195.85M	118.84M
	Stockholders Equity
210.11M	201.48M	155.04M	202.47M	157.25M
Cash Flow		Free Cash Flow
17.02M	141.17M	177.89M	60.34M	139.31M
	Operating Cash Flow
24.48M	147.66M	194.57M	94.55M	145.20M
	Investing Cash Flow
-26.52M	-61.05M	-11.41M	-29.06M	-1.28M
	Financing Cash Flow
-1.51M	-79.79M	-199.58M	-125.13M	-57.14M

Medifast Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MED, the sentiment is Negative. The current price of 14.23 is below the 20-day moving average (MA) of 14.93, below the 50-day MA of 15.79, and below the 200-day MA of 18.75, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 39.42 is Neutral, neither overbought nor oversold. The STOCH value of 26.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MED.

Medifast Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LWAY	77 Outperform	$311.44M	24.31	18.39%	―	18.27%	61.95%
USNA	73 Outperform	$571.41M	13.51	10.19%	―	-7.10%	-8.45%
PRGO	68 Neutral	$4.00B	―	-3.98%	3.81%	-6.05%	-1677.05%
HLF	61 Neutral	$822.73M	3.26	-31.74%	―	-1.37%	75.47%
Sector *	60 Neutral	$13.01B	10.45	0.79%	3.53%	1.60%	-22.47%
MED	55 Neutral	$155.65M	75.21	1.00%	―	-43.80%	-97.89%
WW	39 Underperform	$37.34M	―	31.02%	―	-11.65%	-174.54%

Medifast Corporate Events

Medifast Faces Revenue Decline, Ends Credit Agreement

Medifast, known for its OPTAVIA lifestyle solution, reported a significant 40.6% drop in third-quarter revenue to $140.2 million due to fewer active OPTAVIA coaches and lower productivity. Despite a decrease in gross profit and net income, the company maintained a strong balance sheet with $170 million in cash and no debt, leading to the termination of its credit agreement to save on fees. Medifast is focusing on innovative health solutions and customer acquisition strategies to drive future growth.