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Medifast (MED) Readies for Q4 Earnings: Everything to Note
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Medifast, Inc. (MED - Free Report) is likely to register a top-and-bottom-line decrease from the respective year-ago fiscal quarter’s reading when it reports fourth-quarter 2022 earnings on Feb 21. The Zacks Consensus Estimate for quarterly revenues is pegged at $307 million, suggesting a decline of 18.8% from the prior-year fiscal quarter’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at $2.18 per share. This indicates a drop of 25.1% from the figure reported in the prior-year fiscal quarter.
This weight loss, weight management and healthy living products company has a trailing four-quarter earnings surprise of 25.4%, on average. MED delivered an earnings surprise of 73.8% in the last reported quarter.
Medifast’s gross margin has been contracting year over year for the past few quarters. In the third quarter of 2022, MED’s gross profit fell 7.9% to $282.8 million, mainly due to a decline in the number of customers supported by each Coach and escalated product costs resulting from increased raw ingredient, shipping and labor costs.
The gross profit, as a percentage of revenues, came in at 72.5%, down from the 74.3% reported in the third quarter of 2021. The adjusted income from operations declined 10.7% to $49.2 million. As a percentage of revenues, the metric fell 70 bps to 12.6% year over year. Any continuation of these trends remains a concern.
On its third-quarter earnings call, management curtailed its 2022 guidance due to the impact of macroeconomic volatility and increased inflation in customer acquisition. This raises concerns for the fourth quarter. Management anticipates 2022 revenues in the range of $1.51-$1.59 billion. The company expects the 2022 adjusted EPS in the band of $11.61-$13.05.
However, the strength of Medifast’s OPTAVIA lifestyle solution and coaching support system bodes well. Medifast’s constant focus on developing tools and programs to increase the efficiency of coaches has been yielding results.
Moreover, the relevance of the company’s offerings amid an environment where consumers are choosing health and wellness options has been an upside. Apart from this, Medifast has been focused on making technological and infrastructural investments to drive growth.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Medifast this time. 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, which is not the case here.
Medifast has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies worth considering as our model shows that these have the right combination of elements to beat earnings this season.
The J. M. Smucker Co. (SJM - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #3. The Zacks Consensus Estimate for its third-quarter fiscal 2023 earnings is pegged at $2.14, calling for an 8.2% decline from the year-ago period figure. SJM has a trailing four-quarter earnings surprise of 18.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for The J. M. Smucker’s top line is pegged at $2.2 billion, suggesting growth of 7.8% from the prior-year quarter’s reported figure.
Molson Coors (TAP - Free Report) is likely to register top-and-bottom-line growth when it reports fourth-quarter 2022 results. TAP has an Earnings ESP of +0.27% and a Zacks Rank #3. The Zacks Consensus Estimate for Molson Coors’ bottom line has risen by a penny to $1.06 in the past 30 days, suggesting a 30.9% increase from the year-ago period’s reported figure.
TAP has a trailing four-quarter negative earnings surprise of 12.3%, on average. The consensus mark for Molson Coors’ top line is pegged at $2.7 billion, calling for growth of 1.9% from the prior-year quarter’s reported figure.
Calavo Growers (CVGW - Free Report) has an Earnings ESP of +8.33% and a Zacks Rank of 3 at present. CVGW is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for Calavo Growers’ quarterly revenues is pegged at $276.6 million, which suggests growth of 0.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS of 24 cents suggests a significant increase from the loss of 2 cents per share reported in the year-ago quarter. CVGW delivered a negative earnings surprise of 27.5%, on average, in the trailing four quarters.
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Medifast (MED) Readies for Q4 Earnings: Everything to Note
Medifast, Inc. (MED - Free Report) is likely to register a top-and-bottom-line decrease from the respective year-ago fiscal quarter’s reading when it reports fourth-quarter 2022 earnings on Feb 21. The Zacks Consensus Estimate for quarterly revenues is pegged at $307 million, suggesting a decline of 18.8% from the prior-year fiscal quarter’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at $2.18 per share. This indicates a drop of 25.1% from the figure reported in the prior-year fiscal quarter.
This weight loss, weight management and healthy living products company has a trailing four-quarter earnings surprise of 25.4%, on average. MED delivered an earnings surprise of 73.8% in the last reported quarter.
MEDIFAST INC Price, Consensus and EPS Surprise
MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote
Factors to Consider
Medifast’s gross margin has been contracting year over year for the past few quarters. In the third quarter of 2022, MED’s gross profit fell 7.9% to $282.8 million, mainly due to a decline in the number of customers supported by each Coach and escalated product costs resulting from increased raw ingredient, shipping and labor costs.
The gross profit, as a percentage of revenues, came in at 72.5%, down from the 74.3% reported in the third quarter of 2021. The adjusted income from operations declined 10.7% to $49.2 million. As a percentage of revenues, the metric fell 70 bps to 12.6% year over year. Any continuation of these trends remains a concern.
On its third-quarter earnings call, management curtailed its 2022 guidance due to the impact of macroeconomic volatility and increased inflation in customer acquisition. This raises concerns for the fourth quarter. Management anticipates 2022 revenues in the range of $1.51-$1.59 billion. The company expects the 2022 adjusted EPS in the band of $11.61-$13.05.
However, the strength of Medifast’s OPTAVIA lifestyle solution and coaching support system bodes well. Medifast’s constant focus on developing tools and programs to increase the efficiency of coaches has been yielding results.
Moreover, the relevance of the company’s offerings amid an environment where consumers are choosing health and wellness options has been an upside. Apart from this, Medifast has been focused on making technological and infrastructural investments to drive growth.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Medifast this time. 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, which is not the case here.
Medifast has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies worth considering as our model shows that these have the right combination of elements to beat earnings this season.
The J. M. Smucker Co. (SJM - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #3. The Zacks Consensus Estimate for its third-quarter fiscal 2023 earnings is pegged at $2.14, calling for an 8.2% decline from the year-ago period figure. SJM has a trailing four-quarter earnings surprise of 18.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for The J. M. Smucker’s top line is pegged at $2.2 billion, suggesting growth of 7.8% from the prior-year quarter’s reported figure.
Molson Coors (TAP - Free Report) is likely to register top-and-bottom-line growth when it reports fourth-quarter 2022 results. TAP has an Earnings ESP of +0.27% and a Zacks Rank #3. The Zacks Consensus Estimate for Molson Coors’ bottom line has risen by a penny to $1.06 in the past 30 days, suggesting a 30.9% increase from the year-ago period’s reported figure.
TAP has a trailing four-quarter negative earnings surprise of 12.3%, on average. The consensus mark for Molson Coors’ top line is pegged at $2.7 billion, calling for growth of 1.9% from the prior-year quarter’s reported figure.
Calavo Growers (CVGW - Free Report) has an Earnings ESP of +8.33% and a Zacks Rank of 3 at present. CVGW is likely to register top-and-bottom-line growth when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for Calavo Growers’ quarterly revenues is pegged at $276.6 million, which suggests growth of 0.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the quarterly EPS of 24 cents suggests a significant increase from the loss of 2 cents per share reported in the year-ago quarter. CVGW delivered a negative earnings surprise of 27.5%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.