The Stock Has The Ingredients To Rebound: Medifast Inc. (MED)

Medifast Inc. (NYSE: MED) achieved a growth rate of 150% over one year, as it is just one of the leading providers of healthy lifestyle services. While consumers’ attention to their health was heightened during the COVID-19 pandemic, Medifast interest remains unabated as restrictions are slowly lifted.

Medifast announced in early May that revenues rose 90 percent over the past quarter, as healthy nutrition services and physical activity programs were in high demand. It is encouraging to know that demand for these services remained high after quarantine restrictions loosened in the US. Medifast’s sales strategy is based on exercises and consultations with instructors. Clients are educated on healthy habits, guided to make lifestyle changes, and given support. A primary advantage of the company’s programs over traditional diet advice is their differentiation from the competition.

In the last quarter, Medifast Inc. (NYSE: MED) also experienced negative effects from strong demand. Therefore, the company could not meet all orders on time, which resulted in additional air transportation expenses. As a result, Medifast’s gross margins dropped from 76 % to 73 % on sales this year. The company has forecast that its revenue will reach $1.4 billion – $1.48 billion by the end of the year. Comparatively, revenue reached $ 935 million in 2020.

About 40 years ago, Medifast was founded, and now they are dedicated to helping people lose weight and live healthier lifestyles. Aside from its regular diet lists, Medifast also offers therapeutic diets for patients with specific medical conditions and disorders, such as diabetes or food allergies.

In the last trading session, Medifast Inc. (NYSE: MED) stock fell -1.01% to $290.39. With a trading volume of 0.11 million shares, the company recorded a lower daily trading volume than the 0.12 million published for the past 50 days. Medifast Inc. shares have dropped by -8.31% during the past five days, but they are down -1.30% during the previous month. During the last three months, the stock price has gained 13.02%, and this year it has gained 47.90 %. Moreover, the stock is currently trading at a price-to-earnings ratio of 27.46. In addition, its price to cash flow ratio is 28.77, and its price to sales ratio is 3.16.