Medifast has done well for the investors over the last one year. It has appreciated by 34% appreciation. The ride has not been very smooth, and there has been a lot of volatility during the period. There has been good growth in revenues since 2008, but the net income has witnessed some declines in the past couple of years. Even on a quarterly basis the performance has been a bit erratic. The last quarter, however, was very good. The revenues increased by 8% and the net income increased by nearly 49%. Valuations are very good with a ttm P/E of 21, and forward P/E of around 13. Even the PEG ratio is 1.07 which indicates expectations of good growth over the next few years. The P/S is also very low at 1.06, with the net margins (ttm) of around 5%. The debt is very low and the liquidity is good. Now that the American Medical Association (AMA) has voted to recognize obesity as a disease, it will help the company in the sector. However, its competitors like Weight Watchers (WTW), NutriSystems (NTRI), Herbalife (HLF) etc are also going to be benefited by the decision. Medifast has a more medicinal approach to weight loss, and stands out due to that. The MLM concept is a bit disconcerting, but consistency in fundamentals over the years reduces the worry on that account. The growth can be bolstered by introduction of new products from time to time based on customer feedback and market trends. It introduced several new offerings in the recent past, but also needs to remain open to new molecules coming in the market. Chromadex (CDXC) recently launched a vitamin derivative Nicotinamide Riboside which is expected to be useful in weight loss and diabetes management. Medifast needs to improve the margins and be consistent in its performance. That will translate into a smoother curve for the stock.
INVESTA-nit witt: Your comm ents are worthless and somewhat ridiculous. You fail to point out that MED's management is calling for MED to become a $1 Billion dollar company in the next 4 years which could put MED at $125. As long as they keep introducing new products it should work. You fail to mention the MLM division which should really help MED move product.
Your Adult life isn't full of very many CRITICAL thinking activities!