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In a stark reflection of the challenges facing the diet and wellness sector, Medifast (NYSE:MED) Inc. shares have tumbled to a 52-week low, touching down at $13.55. The company, with a market capitalization of $146 million, maintains strong fundamentals with an impressive 74% gross profit margin and healthy liquidity shown by a current ratio of 3.3. The company, known for its weight-loss programs and products, has seen its stock price severely contract over the past year, with a precipitous 1-year change of -63.66%. This significant downturn has alarmed investors and analysts alike, as Medifast grapples with market pressures and competitive dynamics that have eroded its share value to this annual nadir. According to InvestingPro analysis, the stock appears undervalued at current levels, with 12 additional exclusive ProTips available for deeper insight into the company’s potential.
In other recent news, Medifast reported its fourth-quarter 2024 earnings, showing a mixed financial performance. The company exceeded earnings per share (EPS) expectations with $0.10, surpassing the forecasted -$0.14, but missed revenue projections, bringing in $119 million against an anticipated $131.65 million. This represented a significant year-over-year revenue decline of 37.7%. Despite the revenue shortfall, Medifast maintained a strong cash position with $162.3 million and no debt, indicating financial stability. Analyst firm DA Davidson maintained a Neutral rating on Medifast but lowered the price target from $17.00 to $16.50, reflecting a slight decrease based on valuation metrics. The company launched the Ascend product line in December, targeting individuals using GLP-1 weight loss drugs, and observed positive trends in sales per Coach (NYSE:TPR) for three consecutive quarters. Medifast’s guidance for the first quarter of 2025 projects revenue between $100 million and $120 million, with an EPS range from $0 to -$0.50. The company continues to focus on customer acquisition and improving coach productivity, aiming for potential growth in the number of Coaches in the first half of 2026.
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