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Medifast (MED) to Post Q3 Earnings: What's in the Offing?

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Medifast, Inc. (MED - Free Report) is scheduled to report third-quarter 2019 numbers on Nov 7.

The company’s earnings outperformed the Zacks Consensus Estimate by 5.6%, on average, over the trailing four quarters. In the last reported quarter, it witnessed a positive earnings surprise of 2.3%.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.33 per share, suggesting growth of 16.7% from the year-ago quarter’s reported figure. The consensus mark for the same has been unchanged over the past 30 days. The consensus mark for revenues is pegged at $194.4 million, suggesting an increase of 39.6% from the year-ago quarter’s reported figure.

MEDIFAST INC Price and EPS Surprise


Key Factors to Note

Medifast has been witnessing consistent growth in OPTAVIA-branded products. Further, growth in active earning coaches has been aiding the company.

On its last earnings call, management had projected revenues of $190-$195 million for the third quarter, which suggests an increase from $139 million reported in the prior-year quarter.

The company’s pricing actions to improve gross margin are expected to have aided its performance in the third quarter. Management forecasted adjusted earnings of $1.3-$1.35 for the third quarter, which suggests an improvement from $1.14 reported in the year-ago quarter.

Moreover, Medifast’s top line in the third quarter is expected to reflect gains from the introduction of its new mobile platform.

However, increased expenses related to the convention held in July and higher IT spend, owing to the implementation of the ERP process, might get reflected in Medifast’s bottom line in the quarter under review.

Zacks Model

Our proven model doesn’t conclusively predict 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. But that’s not the case here. 

The company carries a Zacks Rank #3 (Hold) and 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 Favorable Combination

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

Foot Locker (FL - Free Report) has an Earnings ESP of +2.80% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grocery Outlet Holding (GO - Free Report) currently has an Earnings ESP of +2.70% and a Zacks Rank #2.

Ollie’s Bargain Outlet Holdings (OLLI - Free Report) presently has an Earnings ESP of +3.45% and a Zacks Rank #3.

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