We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Medifast (MED) is Likely to Sustain Solid Run in 2021
Read MoreHide Full Article
Medifast, Inc. (MED - Free Report) is in robust shape, mainly attributable to strength in its OPTAVIA lifestyle solution and coaching support system. This along with its other growth-oriented endeavors has helped this Zacks Rank #2 (Buy) stock return a whopping 84.5% so far this year, easily crushing the industry’s rise of 0.8%. Meanwhile, Medifast has also outpaced the S&P 500’s growth of 16.4% in the same time frame, while the Zacks Consumer Staples sector dipped 0.5%.
Let’s delve deeper into the factors, which have not only backed the company so far but also place it well for 2021. Notably, the Zacks Consensus Estimate for its 2020 and 2021 earnings per share has gone up roughly 3% each to $9.16 and $10.42, respectively, over the past 60 days.
The company has been benefiting from strength in OPTAVIA for quite some time. OPTAVIA follows a holistic approach by focusing on six key areas of a human being, namely weight, eating and hydration, motion, sleep, mind and surroundings. Further, OPTAVIA combines scientifically-proven programs, effective products as well as guidance from its coaches to help consumers lead a healthier lifestyle. The OPTAVIA product line is sold through its community of independent coaches who offer support and guidance to their clients. In partnership with OPTAVIA coaches, franchise partners, resellers and its Scientific Advisory Board, Medifast offers comprehensive wellness products and programs that focus on creating.
Markedly, OPTAVIA-branded products formed 83% of consumable units sold in the third quarter of 2020. Incidentally, total active earning OPTAVIA coaches grew 30.7% to 42,100. Further, average revenue per active earning OPTAVIA coach came in at $6,329, up from $5,715 in the same period last year. Also, the same grew 8.2% from the preceding quarter, marking the third straight quarter of sequential growth. Productivity was backed by a rise in the number of clients and elevated average client spend compared with the second quarter. Coach productivity improvement was a result of the company’s constant focus on developing tools and programs to increase the efficiency of coaches. Also, the relevance of the company’s offerings amid an environment where consumers are choosing health and wellness options has been an upside.
Apart from this, Medifast has been undertaking a number of measures to drive growth amid the coronavirus outbreak. The company has been speeding up its long-term supply-chain efforts to ensure that it is able to achieve the expected growth in the next few years. Further, it has made certain moves to expand capacity in powder and bar manufacturing as well as distribution. The company has achieved this via its ties with an expanding network of coal manufacturers whose facilities are qualified to produce Medifast’s products. This new manufacturing capacity came online in October and is likely to keep scaling as the company moves into the next year, which is likely to ultimately double its existing manufacturing capacity by the end of 2021. Also, Medifast is on track to scale its distribution capacity according to the manufacturing capacity.
Additionally, the company is focused on making technological investments, as part of which it opened a new technology center in Utah at the beginning of the year. The company’s core technological initiatives have included alpha testing of two new apps, which are focused on coaches and clients. These include the OPTAVIA Coach Connect app and the OPTAVIA Client app. Certainly, Medifast’s focus on the development of a digital-first approach seems to be yielding results.
Wrapping Up
The abovementioned upsides aided Medifast’s overall third-quarter results, wherein both earnings and sales surged year over year and cruised past the Zacks Consensus Estimate. The company’s programming initiatives, together with improvements to the organization, helped Medifast witness solid progress in the quarter. The company remains committed to making further investments to improve its infrastructure in order to aid growth. Further, Medifast is well placed to encash on the opportunities arising from consumers’ rising inclination toward health and wellness in the United States as well as other parts of the world.
All said, we believe that this producer and distributor of weight loss, weight management and healthy living products is in a good shape to deliver well despite the challenges posed by the pandemic.
B&G Foods (BGS - Free Report) has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 9.3%, on average.
Hain Celestial (HAIN - Free Report) has a Zacks Rank #2 and a trailing four-quarter earnings surprise of 24.6%, on average.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Here's Why Medifast (MED) is Likely to Sustain Solid Run in 2021
Medifast, Inc. (MED - Free Report) is in robust shape, mainly attributable to strength in its OPTAVIA lifestyle solution and coaching support system. This along with its other growth-oriented endeavors has helped this Zacks Rank #2 (Buy) stock return a whopping 84.5% so far this year, easily crushing the industry’s rise of 0.8%. Meanwhile, Medifast has also outpaced the S&P 500’s growth of 16.4% in the same time frame, while the Zacks Consumer Staples sector dipped 0.5%.
Let’s delve deeper into the factors, which have not only backed the company so far but also place it well for 2021. Notably, the Zacks Consensus Estimate for its 2020 and 2021 earnings per share has gone up roughly 3% each to $9.16 and $10.42, respectively, over the past 60 days.
MEDIFAST INC Price, Consensus and EPS Surprise
MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote
Factors Telling Medifast’s Growth Tale
The company has been benefiting from strength in OPTAVIA for quite some time. OPTAVIA follows a holistic approach by focusing on six key areas of a human being, namely weight, eating and hydration, motion, sleep, mind and surroundings. Further, OPTAVIA combines scientifically-proven programs, effective products as well as guidance from its coaches to help consumers lead a healthier lifestyle. The OPTAVIA product line is sold through its community of independent coaches who offer support and guidance to their clients. In partnership with OPTAVIA coaches, franchise partners, resellers and its Scientific Advisory Board, Medifast offers comprehensive wellness products and programs that focus on creating.
Markedly, OPTAVIA-branded products formed 83% of consumable units sold in the third quarter of 2020. Incidentally, total active earning OPTAVIA coaches grew 30.7% to 42,100. Further, average revenue per active earning OPTAVIA coach came in at $6,329, up from $5,715 in the same period last year. Also, the same grew 8.2% from the preceding quarter, marking the third straight quarter of sequential growth. Productivity was backed by a rise in the number of clients and elevated average client spend compared with the second quarter. Coach productivity improvement was a result of the company’s constant focus on developing tools and programs to increase the efficiency of coaches. Also, the relevance of the company’s offerings amid an environment where consumers are choosing health and wellness options has been an upside.
Apart from this, Medifast has been undertaking a number of measures to drive growth amid the coronavirus outbreak. The company has been speeding up its long-term supply-chain efforts to ensure that it is able to achieve the expected growth in the next few years. Further, it has made certain moves to expand capacity in powder and bar manufacturing as well as distribution. The company has achieved this via its ties with an expanding network of coal manufacturers whose facilities are qualified to produce Medifast’s products. This new manufacturing capacity came online in October and is likely to keep scaling as the company moves into the next year, which is likely to ultimately double its existing manufacturing capacity by the end of 2021. Also, Medifast is on track to scale its distribution capacity according to the manufacturing capacity.
Additionally, the company is focused on making technological investments, as part of which it opened a new technology center in Utah at the beginning of the year. The company’s core technological initiatives have included alpha testing of two new apps, which are focused on coaches and clients. These include the OPTAVIA Coach Connect app and the OPTAVIA Client app. Certainly, Medifast’s focus on the development of a digital-first approach seems to be yielding results.
Wrapping Up
The abovementioned upsides aided Medifast’s overall third-quarter results, wherein both earnings and sales surged year over year and cruised past the Zacks Consensus Estimate. The company’s programming initiatives, together with improvements to the organization, helped Medifast witness solid progress in the quarter. The company remains committed to making further investments to improve its infrastructure in order to aid growth. Further, Medifast is well placed to encash on the opportunities arising from consumers’ rising inclination toward health and wellness in the United States as well as other parts of the world.
All said, we believe that this producer and distributor of weight loss, weight management and healthy living products is in a good shape to deliver well despite the challenges posed by the pandemic.
3 Other Stocks to Satisfy Your Palate
Sysco Corporation (SYY - Free Report) , which currently carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 20.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
B&G Foods (BGS - Free Report) has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 9.3%, on average.
Hain Celestial (HAIN - Free Report) has a Zacks Rank #2 and a trailing four-quarter earnings surprise of 24.6%, on average.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>