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Medifast (MED)
NYSE:MED
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Medifast
(NYSE:MED)
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Rating:43Neutral
Price Target:
$10.50
▼(-4.28% Downside)
Action:ReiteratedDate:02/18/26
MED scores low primarily due to deteriorating operating results (revenue declines, a 2025 loss, and weakened cash generation) and bearish technical trend signals. Valuation metrics are also unfavorable due to the extremely high P/E. Offsetting factors are the strong, low-debt balance sheet and an earnings-call plan focused on cost savings and a late-2026 path toward improved profitability, though execution risk remains high given ongoing demand and coach-count pressures.
Positive Factors
Conservative balance sheet / ample liquidity
A large cash balance and zero debt provide a durable financial runway to fund the product launch, restructuring and marketing investments without near-term financing risk. This preserves strategic optionality and lowers solvency risk while management executes a multi-quarter turnaround plan.
High gross margins with clinical differentiation
Sustainably high gross margins indicate strong unit economics for meal and supplement products; clinical data supporting a metabolic-health positioning can defend pricing and drive differentiated demand over months, improving profit recovery as volumes normalize.
Material cost reductions and restructuring
Significant, enacted cost reductions lower the revenue breakeven for profitability and extend cash runway. Structural SG&A cuts and coach compensation realignment improve operating leverage and make a return to positive EBITDA more achievable even if top-line recovery is gradual.
Negative Factors
Multi-year revenue decline and 2025 loss
Sustained revenue contraction and a full-year loss reflect weakening demand and impaired operating leverage. Persistent top-line declines reduce scale benefits of the DTC plus coach model and make margin recovery and consistent free cash flow generation more challenging over the next several quarters.
Sharp deterioration in coach network
The coach network is the company's core distribution and retention mechanism; a structural ~40% decline materially reduces recurring revenue and customer outreach. Recovery depends on reactivating or rebuilding the coach base, a multi‑month process vulnerable to ongoing GLP‑1 secular shifts.
Weak cash generation / compressed free cash flow
Sharply reduced operating cash flow and minimal free cash flow limit reinvestment capacity and increase reliance on the cash stockpile. Thin cash conversion heightens execution risk for product launches and marketing, and reduces buffer against further demand shocks over the coming quarters.
Medifast (MED) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$115.19M
Dividend YieldN/A
Average Volume (3M)226.30K
Price to Earnings (P/E)―
Beta (1Y)0.48
Revenue Growth-36.29%
EPS Growth-96.65%
CountryUS
Employees504
SectorConsumer Cyclical
Sector Strength84
IndustryPersonal Products & Services
Share Statistics
EPS (TTM)-0.55
Shares Outstanding10,991,273
10 Day Avg. Volume268,548
30 Day Avg. Volume226,301
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.59
Price to Sales (P/S)0.30
P/FCF Ratio93.90
Enterprise Value/Market Cap0.38
Enterprise Value/Revenue0.11
Enterprise Value/Gross Profit0.16
Enterprise Value/Ebitda29.72
Forecast
1Y Price Target
$12.00Price Target Upside9.39% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)-1.61
Revenue Forecast (FY)$337.50M
Medifast Business Overview & Revenue Model
Company DescriptionMedifast, Inc., through its subsidiaries, manufactures and distributes weight loss, weight management, healthy living products, and other consumable health and nutritional products in the United States and the Asia-Pacific. The company offers bars, bites, pretzels, puffs, cereal crunch, drinks, hearty choices, oatmeal, pancakes, pudding, soft serves, shakes, smoothies, soft bakes, and soups under the OPTAVIA, Optimal Health by Take Shape for Life, and Flavors of Home brands. It markets its products through point-of-sale transactions over ecommerce platform. The company was founded in 1980 and is headquartered in Baltimore, Maryland.
How the Company Makes MoneyMedifast generates revenue primarily through the sale of its meal replacement products and nutritional supplements, which are marketed through a direct-to-consumer model as well as through a network of independent health coaches. The company's key revenue streams include online sales via its e-commerce platform, sales through its health coaches, and retail partnerships. Medifast also benefits from recurring revenue through its subscription model, where customers can sign up for regular deliveries of their preferred products. Significant partnerships with healthcare providers and a focus on community-driven support contribute to customer retention and brand loyalty, further enhancing its revenue potential.
Medifast Key Performance Indicators (KPIs)
Any
Active Earning Optavia Coaches
Number of Optavia coaches who are actively earning income through the program. Reflects the size and engagement of Medifast’s direct-selling network—growth suggests expanding distribution and potential revenue, while declines point to recruitment or retention problems and reduced sales reach.
Number of Optavia coaches who are actively earning income through the program. Reflects the size and engagement of Medifast’s direct-selling network—growth suggests expanding distribution and potential revenue, while declines point to recruitment or retention problems and reduced sales reach.
Data provided by:
The Fly
The FlyMedifast Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Negative
The call presented a mix of encouraging operational and strategic early signs (positive coach productivity inflection, stronger coach leadership metrics, clinical validation of the metabolic health positioning, meaningful cost reductions and a strong cash position) alongside significant near-term financial challenges (large YoY revenue decline, a ~41% drop in active earning coaches, compressed gross profit and an $18.1M net loss driven in part by a $12.1M deferred tax valuation allowance). Management provided full-year guidance and a path toward returning to profitability in late 2026, but the magnitude of recent declines and the ongoing market disruption from GLP-1 adoption imply substantial execution risk before recovery is evident in top-line results.Q4-2025 Updates
Positive Updates
Coach Productivity Turned Positive
Revenue per active earning coach reached $4,664 in Q4 2025, a year-over-year increase of 6.2% (first YoY improvement in productivity since mid-2022). Management reported coach productivity up ~6% YoY in Q4 and noted this as an early leading indicator for future client acquisition and coach growth.
Improving Field Engagement and Leadership Metrics
Increased coach-led product and opportunity meetings with January activity significantly higher than prior year. A double-digit percentage of active earning coaches reached the Executive Director rank in Q4 (highest percentage since mid-2023) and retention of those coaches for the following two months was the highest since 2022.
Clinically Supported Metabolic Health Differentiation
Company emphasized scientific 'metabolic synchronization' platform. A 16-week clinical study showed a 14% reduction in visceral fat and 98% preservation of lean mass, supporting the company's repositioning around metabolic health and planned new product line.
Disciplined Cost Reductions and Restructuring
Q4 SG&A decreased 31.5% YoY to $59.9M driven by an $18.6M reduction in coach compensation, $5.8M lower company-led marketing spend and $4.2M from employee realignment. The company executed a restructuring with targeted future savings of over $30M incorporated into 2026 guidance.
Strong Balance Sheet
Ended the year with $167.3M in cash, cash equivalents and investment securities, no debt, and working capital of $158.7M as of December 31, 2025, providing financial flexibility during the transition and product development.
Reinstated Annual Guidance and Path to Profitability
Management reinstated full-year 2026 guidance: revenue of $270M to $300M and loss per share between $1.55 and $2.75. Company expects improvements to begin in Q4 2026 after the launch of the new product line and anticipates earnings improvement into 2027.
Negative Updates
Significant Revenue Decline
Q4 2025 revenue was $75.1M, a 36.9% decrease year-over-year, reflecting materially lower sales volumes and demonstrating the near-term revenue impact of the transformation and market disruption.
Sharp Decline in Active Earning Coaches
Active earning coach count fell to approximately 16,100 at quarter end, a decline of 40.6% year-over-year. Management attributes part of the decline to GLP-1 adoption and to accelerating exits of less productive coaches as part of the coach life-cycle reconfiguration.
Gross Profit and Margin Compression
Gross profit decreased 40.9% YoY to $52.1M. Gross profit margin declined by 470 basis points to 69.4%, driven primarily by loss of operating leverage on fixed costs (420 bps) and a one-time restructuring charge (40 bps).
Operating Losses and Net Loss
Loss from operations in Q4 2025 was $7.8M (−10.4% of revenue) versus income from operations of $0.7M in the prior-year quarter. Net loss was $18.1M, or $1.65 per diluted share; adjusted for a $12.1M noncash deferred tax valuation allowance (which represented $1.10 of EPS), loss per share before that allowance was $0.55.
Tax Valuation Allowance and Unusual Tax Effects
Recorded a $12.1M noncash valuation allowance against deferred tax assets in Q4, equal to the ending deferred tax asset balance, resulting in an effective tax rate of negative 183.9% for the quarter and a material one-time EPS headwind.
SG&A as Percentage of Revenue Increased
Although SG&A dollars declined, SG&A as a percentage of revenue increased 630 basis points year-over-year, reflecting loss of leverage on fixed costs (370 bps), higher coach event costs (300 bps) and a one-time restructuring charge (250 bps), partially offset by reduced company-led marketing (440 bps).
Ongoing Market Headwinds from GLP-1 Adoption
Rapid adoption of GLP-1 medications continues to disrupt the traditional weight-loss market and is cited as a primary driver of lower coach counts and revenue pressure; management estimates roughly one-quarter of clients have used or are on GLP-1 drugs and noted a sizable off-ramp population returning from GLP-1 therapy.
Company Guidance
Medifast guided Q1 2026 revenue of $65M–$80M with a loss per share of $0.15–$0.70 and reinstated full-year 2026 guidance of $270M–$300M revenue and a loss per share of $1.55–$2.75, expecting coach productivity to grow both year‑over‑year and sequentially in Q1 and profitability improvements to begin in Q4 2026 after a new product launch; they also forecast working capital of more than $140M at 12/31/26. For context, Q4 2025 results included $75.1M revenue (down 36.9% YoY), ~16,100 active earning coaches (down 40.6% YoY), revenue per active coach of $4,664 (up 6.2% YoY), gross profit $52.1M with a 69.4% margin (down 470 bps), SG&A $59.9M (down 31.5%; SG&A as % revenue up 630 bps), a net loss of $18.1M or $1.65/share (including a $12.1M noncash deferred tax valuation allowance equal to $1.10/share; loss per share before the allowance was $0.55), cash and investments of $167.3M with no debt, and planned restructuring and realignment actions targeting over $30M of future savings.Medifast Financial Statement Overview
Summary
Financial performance is weak: the income statement shows multi-year revenue contraction and a swing to a 2025 loss with negative EBITDA, while cash flow has fallen sharply with very thin 2025 free cash flow. The main offset is a conservatively financed balance sheet with low leverage and substantial equity, limiting near-term solvency risk despite deteriorating returns.Income Statement
Profitability has deteriorated sharply. Revenue has contracted for multiple years (2025: -10.2% after declines in 2023–2024), and the company swung from healthy profits in 2020–2023 (net margins ~9–11%) to near-breakeven in 2024 (~0.3%) and a loss in 2025 (net margin ~-4.8%). Gross margin remains high and fairly stable (~71–74%), but operating leverage has turned negative, with 2025 showing negative EBITDA and net income—suggesting fixed-cost pressure and weaker volume.34
Negative
Balance Sheet
The balance sheet looks conservatively financed with low leverage (debt-to-equity ~0.05–0.17 across the period, improving to ~0.05 in 2025). Equity remains substantial relative to assets, providing a cushion despite the recent loss. The key weakness is returns: return on equity was very strong in 2021–2023, fell to low-single-digits in 2024, and turned negative in 2025, reflecting the earnings downturn rather than balance-sheet stress.72
Positive
Cash Flow
Cash generation has weakened materially versus prior years. Operating cash flow dropped from very strong levels in 2022–2023 to $24.5M in 2024 and just $6.9M in 2025, with free cash flow compressing to $1.25M in 2025. While free cash flow improved versus 2024 on a growth basis, the absolute level is thin and cash flow is not closely tracking earnings (only a small portion of net income/loss is reflected in free cash flow in 2024–2025), which adds uncertainty around near-term cash conversion.41
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 385.79M | 602.46M | 1.07B | 1.60B | 1.53B |
| Gross Profit | 275.19M | 444.62M | 775.85M | 1.14B | 1.13B |
| EBITDA | -3.71M | 15.59M | 139.51M | 195.74M | 223.05M |
| Net Income | -18.67M | 2.09M | 99.42M | 143.57M | 164.03M |
Balance Sheet | |||||
| Total Assets | 257.01M | 284.21M | 309.91M | 316.21M | 398.33M |
| Cash, Cash Equivalents and Short-Term Investments | 167.27M | 162.34M | 150.04M | 87.69M | 109.54M |
| Total Debt | 16.79M | 16.13M | 22.01M | 26.05M | 32.54M |
| Total Liabilities | 58.09M | 74.10M | 108.43M | 161.17M | 195.85M |
| Stockholders Equity | 198.92M | 210.11M | 201.48M | 155.04M | 202.47M |
Cash Flow | |||||
| Free Cash Flow | 1.25M | 17.02M | 141.17M | 177.89M | 60.34M |
| Operating Cash Flow | 6.86M | 24.48M | 147.66M | 194.57M | 94.55M |
| Investing Cash Flow | -7.93M | -26.52M | -61.05M | -11.41M | -29.06M |
| Financing Cash Flow | -564.00K | -1.51M | -79.79M | -199.58M | -125.13M |
Medifast Technical Analysis
Negative
10.97
Price Trends
11.22
Negative
11.63
Negative
12.71
Negative
Market Momentum
-0.23
Positive
37.36
Neutral
36.87
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 10.97 is above the 20-day moving average (MA) of 10.91, below the 50-day MA of 11.22, and below the 200-day MA of 12.71, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 37.36 is Neutral, neither overbought nor oversold. The STOCH value of 36.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MED.
Medifast Risk Analysis
Medifast disclosed 27 risk factors in its most recent earnings report. Medifast reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Medifast Peers Comparison
UnderperformOutperform
Sector (61)
MED
Medifast
10.53
-3.83
-26.67%
MRM
MEDIROM Healthcare Technologies
1.37
0.68
98.55%
WW
WW International, Inc.
21.26
-8.94
-29.60%
Medifast Corporate Events
Business Operations and StrategyExecutive/Board Changes
Medifast announces leadership changes and CEO succession transition
Neutral
Jan 5, 2026
On December 30, 2025, Medifast, Inc. agreed that Chief Business Operations Officer and named executive officer Anthony Tyree would leave the company effective December 31, 2025, in a departure stated as unrelated to any disagreements over operations or policies. Under a separation agreement with subsidiary Jason Pharmaceuticals, Tyree is to receive a lump-sum payment equal to one year of salary and target bonus, eligibility for a 2025 bonus based on actual performance, prorated vesting of restricted and performance share units through year-end 2025, extended health coverage at active-employee rates through December 31, 2026 if COBRA is elected, and up to six months of outplacement assistance, in exchange for standard noncompetition, confidentiality and non-disparagement covenants. Effective January 5, 2026, the company promoted Nicholas Johnson from Chief Field Operations Officer to President of Medifast, broadening his remit to include enterprise marketing, scientific and clinical affairs, product development, and consumable product and plan management, while CFO James Maloney assumes oversight of the supply chain function—moves that underscore Johnson’s role in CEO succession planning and signal a tightening of operational control. Also on January 5, 2026, Chairman and CEO Daniel Chard announced he will transition to non-executive Chairman of the Board effective June 1, 2026, under a letter agreement that reduces his salary, target bonus and long-term incentive opportunity during the remaining period of his executive tenure, then shifts him to a board retainer structure while allowing continued vesting of existing equity awards so long as he remains non-executive chairman, a package that formalizes leadership succession while maintaining continuity for shareholders and the board.
The most recent analyst rating on (MED) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Medifast stock, see the MED Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.