One-glance verdict
Undervalued
$130.91 our estimate vs market $12.26
Wall Street consensus: $12.00 (-90.8% lower than our fair-value estimate)
91% below our estimate, below the bear case
Fundamentals snapshot
Medifast, Inc.
MED · NYQ · Consumer Cyclical · Personal Services
Current price
$12.26
52-week range
$9.22 - $14.65
Market cap
$137.08M
Balance sheet
Healthy
-20.28x Concerning
Net cash $142.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 11.6% to -5.7% over 3 years.
- Risk Return on equity was -12.4% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 4.3% (peer median: 8.2%).
What this company does
Medifast, Inc.
Medifast is a health company that sells its own brand of diet foods, like special shakes and bars, through a network of independent coaches who guide customers on weight loss plans. The company's revenue (the total money it makes from sales) comes almost entirely from these OPTAVIA-branded products. This business model is important because its success depends on the ability of its coaches to find and keep customers, especially as new weight-loss drugs create more competition.
How the company got here
Medifast was started in 1980 by a doctor, William Vitale, who sold weight-loss products directly to other doctors to help their patients. A major shift happened in 2002 when the company launched a new model called 'Take Shape for Life', which used personal coaches to sell products and support clients. This coaching-based approach became the company's main focus, and in 2017, it was rebranded to OPTAVIA to emphasize a broader focus on lifestyle and habits. The company grew rapidly, especially during the pandemic, but has recently faced challenges as the weight-loss market has changed.
What it actually does
Medifast is a health and wellness company that sells structured meal plans and food products designed for weight loss and long-term health. You won't find its products in a grocery store; instead, they are sold directly to customers through an e-commerce (online shopping) platform. The core of their business is a program called OPTAVIA, which combines portion-controlled foods, called 'Fuelings' (like bars, shakes, and snacks), with support and guidance from a network of independent coaches. The idea is to provide a complete system that helps people change their eating habits for the long run.
OPTAVIA
This is the company's single, primary business. The OPTAVIA program generates nearly all of Medifast's revenue (the money it brings in from sales) by selling its branded food products and lifestyle plans. Customers purchase kits of 'Fuelings'—scientifically designed, portion-controlled meals like shakes, bars, and soups—to replace most of their daily food intake. A key feature is the human element: customers are paired with an independent 'OPTAVIA Coach', who provides one-on-one guidance and motivation. These coaches are typically past clients themselves, and they earn commissions (a percentage of the sale) based on the products sold to the clients they support.
What management is betting on now
Management is currently focused on adapting its business to major shifts in the weight-loss industry, particularly the rise of new weight-loss medications. They are repositioning OPTAVIA to be a broader 'metabolic health' system that can support customers who are using these medications, not just those focused on meal-replacement plans. This includes forming partnerships with healthcare providers and developing programs that complement medical weight-loss treatments. The company is also working to rebuild its network of active coaches and improve their productivity, as this is the core of their sales model.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$7.68M
FY2024 Q4
$-7.23M
FY2025 Q1
$1.88M
FY2025 Q2
$-4.76M
FY2025 Q3
$10.75M
FY2025 Q4
$-6.63M
FY2026 Q1
$-836.00K
FY2026 Q2
$728.00K
Revenue
$76.38M
Net income
$-3.10M
Diluted EPS
-0.28
Operating cash flow
$1.70M
Free cash flow
$728.00K
Fetching…
Sources
Revenue
$76.04M
Net income
$-2.12M
Diluted EPS
-0.19
Operating cash flow
$260.00K
Free cash flow
$-836.00K
Fetching…
Sources
Revenue
$75.10M
Net income
$-18.12M
Diluted EPS
-1.64
Operating cash flow
$-5.28M
Free cash flow
$-6.63M
Fetching…
Sources
Revenue
$89.41M
Net income
$-2.26M
Diluted EPS
-0.21
Operating cash flow
$12.11M
Free cash flow
$10.75M
Fetching…
Sources
Revenue
$105.56M
Net income
$2.48M
Diluted EPS
0.22
Operating cash flow
$-3.38M
Free cash flow
$-4.76M
Fetching…
Sources
Revenue
$115.73M
Net income
$-772.00K
Diluted EPS
-0.07
Operating cash flow
$3.41M
Free cash flow
$1.88M
Fetching…
Sources
Revenue
$119.00M
Net income
$800.00K
Diluted EPS
0.08
Operating cash flow
$-4.95M
Free cash flow
$-7.23M
Fetching…
Sources
Revenue
$140.16M
Net income
$1.13M
Diluted EPS
0.10
Operating cash flow
$9.07M
Free cash flow
$7.68M
Fetching…
Sources
Is it cheap or expensive?
Fair value $130.91 vs current price $12.26
Wall Street consensus is the average analyst price target: $12.00 (-90.8% lower than our fair-value estimate).
Our most-likely fair value is $130.91 a share — about 967.8% above today's price of $12.26, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $142.2M - more cash than debt. Interest coverage -20.3x.
Net debt
$-142.20M
Interest coverage
-20.28x
Medifast, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
MED
BASELINE
Medifast, Inc.
Total debt $27.62M Interest coverage -20.28x This is the baseline the peer rows are being compared against.
Total debt $2.20B Interest coverage 2.24x This peer still has a real interest-payment cushion, while MED does not.
Total debt $0.00 Interest coverage 60.41x This peer still has a real interest-payment cushion, while MED does not.
Total debt $288.10M Interest coverage 6.52x This peer still has a real interest-payment cushion, while MED does not.
Total debt $426.31M Interest coverage 0.73x This peer still has a real interest-payment cushion, while MED does not.
Total debt $448.46M Interest coverage 9.40x This peer still has a real interest-payment cushion, while MED does not.
What you should know
The case for and against MED
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 11.6% to -5.7% over 3 years.
-
Return on equity was -12.4% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 4.3% (peer median: 8.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-43.79x
P/B
0.65x
P/S
0.43x
EV/EBITDA
3.62x
PEG ratio
0.97x
Profitability
How much profit each dollar creates
Gross margin
69.2%
Operating margin
-5.7%
Net margin
-8.1%
ROE
-12.4%
ROA
-4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.14x
Current ratio
4.86x
Quick ratio
4.09x
Total debt
$27.62M
Total cash
$169.82M
Growth
How the business has been compounding
Revenue TTM
$316.93M
Revenue 5Y CAGR
-29.1%
EPS TTM
-2.33
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$8.79M
Free CF TTM
$1.25M
FCF margin
0.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2023-09-18