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Medifast (MED) Down 5.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Medifast (MED - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Medifast due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for MEDIFAST INC before we dive into how investors and analysts have reacted as of late.
Medifast's Q4 Loss Wider Than Expected, Revenues Decline 37% Y/Y
Medifast delivered fourth-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate while the bottom line missing the same. Both metrics showed a year-over-year decline.
Medifast’s Quarterly Performance: Key Insights
MED reported a quarterly loss of $1.65 per share, wider than the Zacks Consensus Estimate of a loss of 76 cents per share. The results include a tax provision charge to establish a non-cash valuation allowance on the deferred tax balance totaling $12.1 million, equivalent to a loss of $1.10 per share. Medifast’s earnings per share (EPS) came in at 7 cents in the year-ago period, while the adjusted EPS was 10 cents.
Net revenues of $75.1 million declined 36.9% year over year due to a dip in the number of active earning OPTAVIA coaches. However, net revenues of this Zacks Rank #2 (Buy) company exceeded the Zacks Consensus Estimate of $70.8 million. The average revenue per active earning OPTAVIA Coach increased 6.2% year over year to $4,664 from $4,391, reflecting changes in the composition and productivity of the coach network.
The total number of active earning OPTAVIA coaches declined 40.6% year over year to 16,100 from 27,100 seen in the prior-year period. The decline was attributed to client acquisition challenges, with the company also noting broader pressures in the weight-loss market, including the growing use of GLP-1 medications.
MED’s Margin & Cost Details
Gross profit was $52.1 million, down 40.9% year over year on lower revenues. The gross margin was 69.4% compared with 74.1% in the prior-year period. The decline in gross profit margin was mainly due to a 420-basis-point loss of fixed cost leverage, along with a one-time restructuring charge that reduced margins by an additional 40 basis points.
Selling, general, and administrative expenses declined in the fourth quarter, decreasing 31.5% year over year to $59.9 million from $87.5 million in the prior-year period. The reduction was primarily driven by an $18.6 million fall in coach compensation, reflecting lower sales volumes and fewer active earning coaches. Additional savings came from a $5.8 million reduction in company-led marketing expenses and a $4.2 million decrease following the realignment of the employee base to match lower revenue levels. These benefits were partially offset by a $1.9 million one-time restructuring charge and a $1.6 million increase in coach event costs.
Despite the absolute decline, SG&A rose 630 basis points as a percentage of revenue to 79.8%, reflecting reduced fixed-cost leverage and higher event and restructuring costs, partially offset by lower marketing spending. The loss from operations was $7.8 million in contrast to the operating income of $0.7 million in the year-ago quarter. As a percentage of revenues, this represented a loss from operations of 10.4% of revenues versus an operating income of 0.6% in the prior-year period.
Medifast’s Financial Health Snapshot
MED concluded the quarter with cash, cash equivalents and investment securities of $167.3 million, no debt (as of Dec. 31, 2025) and total shareholders’ equity of $198.9 million.
Sneak Peek Into MED’s 2026 Outlook
The company expects first-quarter 2026 revenues between $65 million and $80 million, with loss per share expected to be between 15 cents and 70 cents. For 2026, revenues are expected to be in the range of $270 million to $300 million, with loss per share expected between $1.55 and $2.75.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -358.33% due to these changes.
VGM Scores
Currently, Medifast has a poor Growth Score of F, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Medifast has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Medifast (MED) Down 5.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Medifast (MED - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Medifast due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for MEDIFAST INC before we dive into how investors and analysts have reacted as of late.
Medifast's Q4 Loss Wider Than Expected, Revenues Decline 37% Y/Y
Medifast delivered fourth-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate while the bottom line missing the same. Both metrics showed a year-over-year decline.
Medifast’s Quarterly Performance: Key Insights
MED reported a quarterly loss of $1.65 per share, wider than the Zacks Consensus Estimate of a loss of 76 cents per share. The results include a tax provision charge to establish a non-cash valuation allowance on the deferred tax balance totaling $12.1 million, equivalent to a loss of $1.10 per share. Medifast’s earnings per share (EPS) came in at 7 cents in the year-ago period, while the adjusted EPS was 10 cents.
Net revenues of $75.1 million declined 36.9% year over year due to a dip in the number of active earning OPTAVIA coaches. However, net revenues of this Zacks Rank #2 (Buy) company exceeded the Zacks Consensus Estimate of $70.8 million. The average revenue per active earning OPTAVIA Coach increased 6.2% year over year to $4,664 from $4,391, reflecting changes in the composition and productivity of the coach network.
The total number of active earning OPTAVIA coaches declined 40.6% year over year to 16,100 from 27,100 seen in the prior-year period. The decline was attributed to client acquisition challenges, with the company also noting broader pressures in the weight-loss market, including the growing use of GLP-1 medications.
MED’s Margin & Cost Details
Gross profit was $52.1 million, down 40.9% year over year on lower revenues. The gross margin was 69.4% compared with 74.1% in the prior-year period. The decline in gross profit margin was mainly due to a 420-basis-point loss of fixed cost leverage, along with a one-time restructuring charge that reduced margins by an additional 40 basis points.
Selling, general, and administrative expenses declined in the fourth quarter, decreasing 31.5% year over year to $59.9 million from $87.5 million in the prior-year period. The reduction was primarily driven by an $18.6 million fall in coach compensation, reflecting lower sales volumes and fewer active earning coaches. Additional savings came from a $5.8 million reduction in company-led marketing expenses and a $4.2 million decrease following the realignment of the employee base to match lower revenue levels. These benefits were partially offset by a $1.9 million one-time restructuring charge and a $1.6 million increase in coach event costs.
Despite the absolute decline, SG&A rose 630 basis points as a percentage of revenue to 79.8%, reflecting reduced fixed-cost leverage and higher event and restructuring costs, partially offset by lower marketing spending. The loss from operations was $7.8 million in contrast to the operating income of $0.7 million in the year-ago quarter. As a percentage of revenues, this represented a loss from operations of 10.4% of revenues versus an operating income of 0.6% in the prior-year period.
Medifast’s Financial Health Snapshot
MED concluded the quarter with cash, cash equivalents and investment securities of $167.3 million, no debt (as of Dec. 31, 2025) and total shareholders’ equity of $198.9 million.
Sneak Peek Into MED’s 2026 Outlook
The company expects first-quarter 2026 revenues between $65 million and $80 million, with loss per share expected to be between 15 cents and 70 cents. For 2026, revenues are expected to be in the range of $270 million to $300 million, with loss per share expected between $1.55 and $2.75.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -358.33% due to these changes.
VGM Scores
Currently, Medifast has a poor Growth Score of F, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Medifast has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.