A month has gone by since the last earnings report for Medifast (MED Quick QuoteMED - Free Report) . Shares have lost about 5.1% 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 drivers for MEDIFAST INC before we dive into how investors and analysts have reacted as of late.

Medifast’s Q1 Loss Narrower Than Expected, Revenues Decline Y/Y

Medifast reported first-quarter 2026 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics saw year-over-year declines.

Medifast’s Quarterly Performance: Key Insights

Medifast posted a loss of 19 cents per share, narrower than the Zacks Consensus Estimate of a loss of 55 cents. However, the bottom line deteriorated from a loss of 7 cents per share reported in the year-ago quarter.

Net revenues declined 34.3% year over year to $76 million from $115.7 million, primarily due to a significant reduction in the number of active earning OPTAVIA coaches. Despite the decline, net revenues of the company surpassed the Zacks Consensus Estimate of $73.8 million, reflecting a 3.05% positive surprise.

The company continued to face pressure on its coach network, with active earning coaches declining 44.9% year over year to 14,000 from 25,400 in the same period last year. This drop has been attributed to challenges in client acquisition and the growing popularity of GLP-1 weight-loss medications.

Despite the decline in coach count, productivity improved meaningfully. The average revenue per active earning coach increased 19.2% year over year to $5,432 from $4,556 in the prior-year period.

MED’s Margin & Cost Details

Gross profit declined 38.6% year over year to $51.8 million from $84.2 million in the prior-year period, while gross margin contracted to 68.1% from 72.8% in the prior-year period, mainly due to the deleveraging of fixed costs.

Selling, general and administrative (SG&A) expenses decreased 35.6% year over year to $55.1 million, driven by lower coach compensation, lower volume and fewer active earning coaches with reduced marketing expenses. As a percentage of revenue, SG&A declined 150 basis points to 72.4%, primarily due to lower company-led marketing expenses and a one-time gain from the Maryland Distribution Center sale, partially offset by fixed-cost deleverage from lower sales volume.

The company reported an operating loss of $3.3 million, significantly wider than the loss of $1.3 million in the prior-year quarter.

Medifast’s Financial Health Snapshot

As of March 31, 2026, Medifast maintained a strong balance sheet position with $168.9 million in cash, cash equivalents, and investment securities and no debt.

Sneak Peek Into MED’s Future Outlook

The company expects revenues for the second quarter of 2026 between $60 million and $80 million, with loss per share projected to be between 50 cents and $1.00. Management anticipates continued coach productivity growth, both year over year and sequentially, during the second quarter.

For full-year 2026, revenue is expected to be in the range of $270 million to $300 million, while loss per share is projected to be between $1.55 and $2.75.
The company also expects profitability improvements to begin in the fourth quarter of 2026 following the launch of its new product line, with earnings improvement targeted to continue through 2027 and beyond.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -61.91% due to these changes.

VGM Scores

At this time, Medifast has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. 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. Notably, Medifast has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Medifast belongs to the Zacks Food - Miscellaneous industry. Another stock from the same industry, Sysco (SYY Quick QuoteSYY - Free Report) , has gained 1.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Sysco reported revenues of $20.52 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $0.94 for the same period compares with $0.96 a year ago.

Sysco is expected to post earnings of $1.51 per share for the current quarter, representing a year-over-year change of +2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Sysco has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.