Medifast Earnings Preview

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After beating estimates last quarter by $0.03, Medifast (NYS: MED) has set the standard for itself. The company will unveil its latest earnings Thursday. Medifast is engaged in the production, distribution, and sale of weight management and disease management products.

What analysts say:

  • Buy, sell, or hold?: Analysts are very bullish on this stock, unanimously backing it as a buy. Analysts' rating of Medifast has stayed constant from three months prior.
  • Revenue forecasts: On average, analysts predict $81.8 million in revenue this quarter. That would represent a rise of 22.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.48 per share. Estimates range from $0.43 to $0.50.

What our community says:
CAPS All-Stars are solidly backing the stock with 84.1% awarding it an "outperform" rating. The community at large concurs with the All-Stars with 84.5% giving it a rating of "outperform." Fools are gung-ho about Medifast and haven't been shy with their opinions lately, logging 162 posts in the past 30 days. Medifast's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Medifast's profit has risen year over year by an average of 48.6%.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

76.3%

74.2%

75.0%

74.2%

Operating Margin

13.5%

8.1%

13.4%

13.9%

Net Margin

8.6%

5.4%

8.5%

8.3%

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At the time this article was published

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