U.S. Markets close in 2 hrs 9 mins
  • S&P 500

    3,817.66
    -3.89 (-0.10%)
     
  • Dow 30

    31,044.95
    +97.96 (+0.32%)
     
  • Nasdaq

    11,157.57
    -23.97 (-0.21%)
     
  • Russell 2000

    1,708.18
    -30.66 (-1.76%)
     
  • Crude Oil

    111.14
    -0.62 (-0.55%)
     
  • Gold

    1,817.40
    -3.80 (-0.21%)
     
  • Silver

    20.73
    -0.15 (-0.70%)
     
  • EUR/USD

    1.0453
    -0.0073 (-0.6899%)
     
  • 10-Yr Bond

    3.1100
    -0.0960 (-2.99%)
     
  • Vix

    28.76
    +0.40 (+1.41%)
     
  • GBP/USD

    1.2134
    -0.0050 (-0.4126%)
     
  • USD/JPY

    136.5200
    +0.3920 (+0.2880%)
     
  • BTC-USD

    20,007.66
    -620.83 (-3.01%)
     
  • CMC Crypto 200

    430.59
    -9.07 (-2.06%)
     
  • FTSE 100

    7,312.32
    -11.09 (-0.15%)
     
  • Nikkei 225

    26,804.60
    -244.87 (-0.91%)
     

Medifast (MED) Q4 Earnings Beat, Strength in OPTAVIA Key Driver

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Medifast, Inc. MED delivered splendid fourth-quarter 2021 results, with the top and the bottom line beating the Zacks Consensus Estimate. Net revenues and earnings increased year over year. Strength in OPTAVIA remained a key driver with the average revenue per active earning OPTAVIA coach, up 6.6% year over year.

Continued strength in OPTAVIA Coaches and Clients has been aiding the company’s impressive performance. Medifast is focused on using new technology, digital apps and data to improve efficiency. We note that consumers’ increased inclination toward health along with a solid OPTAVIA coach-based model has been helping Medifast draw new clients.

MEDIFAST INC Price and EPS Surprise

MEDIFAST INC Price and EPS Surprise
MEDIFAST INC Price and EPS Surprise

MEDIFAST INC price-eps-surprise | MEDIFAST INC Quote

Quarterly Highlights

Medifast posted earnings of $2.91 per share, which surpassed the Zacks Consensus Estimate of $2.67 and increased 23.3% on a year-over-year basis.

Net revenues of $377.8 million soared 42.6% year over year, reflecting solid execution across all business areas. The metric beat the Zacks Consensus Estimate of $376 million. Total active earning OPTAVIA Coaches jumped 35.3% to 59,800.

The average revenue per active earning OPTAVIA coach increased 6.6% to $6,321. The uptick can be mainly attributed to continued growth in active earning OPTAVIA Coach count along with rising productivity per active earning OPTAVIA Coach.

The Zacks Rank #2 (Buy) company’s gross profit rose 39.7% to $278.3 million, owing to higher revenues. Gross profit, as a percentage of revenues, came in at 73.7%, down from 75.2% reported in fourth-quarter 2020. The downside can be attributed to the adverse impact of inflation on product and shipping costs.

Selling, general, and administrative expenses (SG&A) came in at $231.4 million, up 43.5% year over year. The increase in SG&A expenses was a result of higher OPTAVIA Coach compensation expense as well as higher salaries and benefits-related costs. Increased costs related to continued investment in information technology and distribution as well as a rise in credit card fees were also a drag. As a percentage of revenues, SG&A expenses expanded 40 bps to 61.3%.

Income from operations rose 23.4% to $46.8 million. As a percentage of revenue, income from operations fell from 14.3% to 12.4% year over year.

Other Financial Updates

Medifast concluded the fourth quarter with cash, cash equivalents and investment securities of $109.5 million and total shareholders’ equity of $202.5 million. Management did not have any interest-bearing debt on its balance sheet as of Dec 31, 2021.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Management declared a quarterly cash dividend of $1.42 per share, which was payable on Feb 8, 2022. The company used $10 million for share buybacks in the fourth quarter. It has roughly 2.1 million shares remaining under its buyback plan, as of Dec 31, 2021.

Outlook

Management anticipates 2022 revenue in the range of $1.72-$1.79 billion. The company’s revenues came in at $1.5 billion in 2021. The company expects 2022 earnings per share (EPS) in the band of $14.50 to $16. The company posted an EPS of $13.89 in 2021.

Medifast’s shares have declined 19.7% in the past three months against the industry’s growth of 6.1%.

Looking for Solid Food Stocks? Check These

Some better-ranked stocks are Tyson Foods, Inc. TSN, Pilgrim's Pride PPC and Flowers Foods FLO.

Tyson Foods, a meat provider, currently sports a Zacks Rank #1 (Strong Buy). Shares of Tyson Foods have increased 10.5% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tyson Foods’ current financial year sales suggests growth of 9.5% from the year-ago reported number. TSN has a trailing four-quarter earnings surprise of 32.2%, on average.

Pilgrim's Pride, the provider of frozen, fresh and value-added chicken products, currently sports a Zacks Rank #1. Shares of Pilgrim's Pride have decreased 15.4% in the past three months.

The Zacks Consensus Estimate for Pilgrim's Pride current financial year EPS suggests growth of 16.2% from the year-ago reported number. PPC has a trailing four-quarter earnings surprise of 24.9%, on average.

Flowers Foods, which produces and markets packaged bakery products, carries a Zacks Rank #2. Shares of Flowers Foods have moved up 5.4% in the past three months.

The Zacks Consensus Estimate for Flowers Foods' 2022 financial year EPS suggests growth of 3.2% from the year-ago reported number. FLO has a trailing four-quarter earnings surprise of 9%, on average.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Tyson Foods, Inc. (TSN) : Free Stock Analysis Report

Flowers Foods, Inc. (FLO) : Free Stock Analysis Report

Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report

MEDIFAST INC (MED) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research