Are Investors Undervaluing Medifast (MED) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Medifast (MED). MED is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.87. This compares to its industry's average Forward P/E of 19.15. Over the past 52 weeks, MED's Forward P/E has been as high as 20.28 and as low as 8.03, with a median of 14.13.
Investors should also note that MED holds a PEG ratio of 1. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MED's PEG compares to its industry's average PEG of 2.61. MED's PEG has been as high as 1.01 and as low as 1, with a median of 1, all within the past year.
These are only a few of the key metrics included in Medifast's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MED looks like an impressive value stock at the moment.
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