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Medifast (MED) Gains But Lags Market: What You Should Know

Zacks Equity Research
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Medifast (MED) closed the most recent trading day at $131.81, moving +0.02% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 0.84%, while the tech-heavy Nasdaq added 1.42%.

Heading into today, shares of the weight-loss company had gained 0.53% over the past month, lagging the Consumer Staples sector's gain of 1.49% and the S&P 500's gain of 1.18% in that time.

Investors will be hoping for strength from MED as it approaches its next earnings release. The company is expected to report EPS of $1.52, up 50.5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $151.70 million, up 53.85% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.52 per share and revenue of $709.20 million, which would represent changes of +41.13% and +41.56%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MED. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 11.45% higher. MED is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, MED is holding a Forward P/E ratio of 20.21. This represents a premium compared to its industry's average Forward P/E of 17.53.

Investors should also note that MED has a PEG ratio of 1.01 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MED's industry had an average PEG ratio of 2.2 as of yesterday's close.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 100, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MED in the coming trading sessions, be sure to utilize Zacks.com.

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