Attractive stocks have exceptional fundamentals. In the case of Medifast, Inc. (NYSE:MED), there's is a financially-sound company with a strong history and a excellent growth outlook. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Medifast here.
Outstanding track record with flawless balance sheet
Investors in search for stocks with room to flourish should look no further than MED, with its expected earnings growth of 25%. Earnings growth is paired with an eye-catching top-line trajectory of 60%, which indicates a high-quality bottom-line expansion, as opposed to those driven simple by unsustainable cost-cutting activities. In the previous year, MED has ramped up its bottom line by 77%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 57%. which is an notable feat for the company.
MED's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that MED has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Investors should not worry about MED’s debt levels because the company has none! This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Medifast, there are three pertinent factors you should further examine:
- Valuation: What is MED worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MED is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does MED return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from MED as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MED? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.