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.
Medifast (MED) Down 2.7% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Medifast (MED - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Medifast due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Medifast Q4 Earnings & Sales Beat Estimates
Medifast delivered fourth-quarter 2022 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and the latter increased year over year.
However, results were somewhat hurt by reduced Coach productivity and cost inflation. Also, the company’s revenues and earnings per share (EPS) guidance for the first quarter of 2023 indicate a decline from the year-ago period. Shares of the company tumbled 9.2% in the after-market trading session on Feb 21.
Quarterly Highlights
Medifast’s adjusted earnings rallied 27.1% to $3.70 per share in the fourth quarter, which surpassed the Zacks Consensus Estimate of $2.18.
Net revenues of $337.2 million beat the Zacks Consensus Estimate of $306.7 million, but declined 10.7% year over year due to reduced Coach productivity. The total number of active earning OPTAVIA Coaches rose 1.8% year over year to 60,900. The average revenue per active earning OPTAVIA Coach was $5,538 compared with $6,321 reported in the year-ago quarter.
The adjusted gross profit fell 11.7% to $245.8 million and the adjusted gross margin contracted 80 basis points (bps) to 72.9%. The downside could be accountable to higher inflation cost which was partially offset by lower shipping cost and effective pricing changes.
Adjusted SG&A expenses came in at $192.5 million, down 16.8% year over year. As a percentage of revenues, adjusted SG&A expenses contracted 420 bps to 57.1%.
The adjusted income from operations declined 13.7% to $53.3 million. As a percentage of revenues, the metric increased 340 bps to 15.8%.
Other Financial Updates
This company concluded the quarter with cash, cash equivalents and investment securities of $87.7 million, no interest-bearing debt (as of Dec 31) and total shareholders’ equity of approximately $155 million.
The company declared a quarterly cash dividend of $1.64 per share, which was paid on Feb 7, 2023, to shareholders of record as of Dec 20.
Guidance
Management believes that macroeconomic impact will still impact customer acquisition and anticipate first-quarter 2023 revenues in the range of $300-$320 million.
The company’s revenues came in at $417.6 million in the first quarter of 2022. The company expects first-quarter 2023 EPS in the band of $1.75-$2.40, compared with $3.59 reported in the first quarter of 2022.
The company assumes that the effective tax rate to be between 26% and 27% in the first quarter of 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -41.89% due to these changes.
VGM Scores
Currently, Medifast has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Medifast has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Medifast (MED) Down 2.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Medifast (MED - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Medifast due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Medifast Q4 Earnings & Sales Beat Estimates
Medifast delivered fourth-quarter 2022 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and the latter increased year over year.
However, results were somewhat hurt by reduced Coach productivity and cost inflation. Also, the company’s revenues and earnings per share (EPS) guidance for the first quarter of 2023 indicate a decline from the year-ago period. Shares of the company tumbled 9.2% in the after-market trading session on Feb 21.
Quarterly Highlights
Medifast’s adjusted earnings rallied 27.1% to $3.70 per share in the fourth quarter, which surpassed the Zacks Consensus Estimate of $2.18.
Net revenues of $337.2 million beat the Zacks Consensus Estimate of $306.7 million, but declined 10.7% year over year due to reduced Coach productivity. The total number of active earning OPTAVIA Coaches rose 1.8% year over year to 60,900. The average revenue per active earning OPTAVIA Coach was $5,538 compared with $6,321 reported in the year-ago quarter.
The adjusted gross profit fell 11.7% to $245.8 million and the adjusted gross margin contracted 80 basis points (bps) to 72.9%. The downside could be accountable to higher inflation cost which was partially offset by lower shipping cost and effective pricing changes.
Adjusted SG&A expenses came in at $192.5 million, down 16.8% year over year. As a percentage of revenues, adjusted SG&A expenses contracted 420 bps to 57.1%.
The adjusted income from operations declined 13.7% to $53.3 million. As a percentage of revenues, the metric increased 340 bps to 15.8%.
Other Financial Updates
This company concluded the quarter with cash, cash equivalents and investment securities of $87.7 million, no interest-bearing debt (as of Dec 31) and total shareholders’ equity of approximately $155 million.
The company declared a quarterly cash dividend of $1.64 per share, which was paid on Feb 7, 2023, to shareholders of record as of Dec 20.
Guidance
Management believes that macroeconomic impact will still impact customer acquisition and anticipate first-quarter 2023 revenues in the range of $300-$320 million.
The company’s revenues came in at $417.6 million in the first quarter of 2022. The company expects first-quarter 2023 EPS in the band of $1.75-$2.40, compared with $3.59 reported in the first quarter of 2022.
The company assumes that the effective tax rate to be between 26% and 27% in the first quarter of 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -41.89% due to these changes.
VGM Scores
Currently, Medifast has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Medifast has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.