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What's in the Cards for Medifast (MED) This Earnings Season?

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Medifast Inc. (MED - Free Report) is likely to post an increase in the top and the bottom line when it reports second-quarter 2020 results on Aug 5. The Zacks Consensus Estimate for second-quarter earnings has moved up by a cent to $1.84 in the past 30 days. The estimate suggests an increase of 5.1% from the year-ago quarter’s reported figure. Moreover, the consensus mark for revenues is pegged at $194.8 million that indicates growth of 4.1% from the figure reported in the year-ago quarter.

Notably, this manufacturer and distributor of healthy living products and programs has a trailing four-quarter earnings surprise of 14.8%, on average

MEDIFAST INC Price and EPS Surprise

MEDIFAST INC Price and EPS Surprise

MEDIFAST INC price-eps-surprise | MEDIFAST INC Quote

Key Factors to Note

Medifast is gaining from strength in OPTAVIA — a leading health and wellness communities. In this regard, increase in the number of active earning OPTAVIA coaches is yielding. Also, robust pricing actions undertaken in mid 2019 have been boosting its gross profit margin. Moreover, the company’s actions like floating new incentive plans and promotional offers to stay afloat amid the coronavirus outbreak bode well.

However, Medifast has been grappling with escalated SG&A expenses due to higher OPTAVIA commission, professional service costs along with rise in salaries, benefits and severance. Also, volatile foreign currency movements are a concern.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Medifast this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Medifast carries a Zacks Rank #2 and an Earnings ESP of +2.53%.

Other Stocks With Favorable Combination

Here are some other companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.

Nu Skin (NUS - Free Report) currently has an Earnings ESP of +10.74% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flowers Foods (FLO - Free Report) currently has an Earnings ESP of +4.49% and a Zacks Rank of 2.

Estee Lauder (EL - Free Report) has an Earnings ESP of +9.54% and a Zacks Rank #3.

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