Send me real-time posts from this site at my email
Zacks

Here's How Medifast (MED) Looks Just Ahead of Q3 Earnings

Medifast, Inc. MED is likely to register an increase in the top line when it reports third-quarter 2020 results on Nov 2, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $246.4 million, indicating an improvement of 29.6% from the prior-year reported figure.

Further, the bottom line is anticipated to improve year over year. The Zacks Consensus Estimate for earnings for the quarter under review has increased 12 cents to $2.49 over the past 30 days. The figure suggests a sharp growth from $1.32 reported in the year-ago quarter.

Notably, the manufacturer and distributor of weight loss, weight management and healthy living products has a trailing four-quarter earnings surprise of 15.8%, on average. In the last reported quarter, this Baltimore, MD-based company’s bottom line surpassed the Zacks Consensus Estimate by 6.5%.

MEDIFAST INC Price, Consensus and EPS Surprise

MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote

Factors to Note

Medifast is likely to have gained from consumers’ growing inclination toward health and wellness products and services amid the pandemic. Majority of the company’s revenues are generated from subscription orders, which we believe is likely to have remained stellar owing to the ongoing crisis. On its last earnings call, management highlighted that trends in July were in line with or better than those in the second quarter.

Analysts cited that consistent sturdy demand and engagement among OPTAVIA coaches and clients are likely to have contributed to the top line. OPTAVIA combines scientifically-proven programs, effective products and guidance from its coaches to help consumers lead a healthier lifestyle. To keep pace with the changing scenario, management has significantly altered its programs for the second half of 2020 — including the development of a digital-first approach.

While aforementioned factors raise optimism, impact of increased promotional activity and higher production costs cannot be ignored. Also, any deleverage in SG&A expenses due to higher OPTAVIA commission expense may have weighed on margins.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for Medifast this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Medifast has a Zacks Rank #3 and an Earnings ESP of +1.54%.

Other Stocks With a Favorable Combination

Here are some other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:

General Mills GIS has an Earnings ESP of +3.59% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Darling Ingredients DAR has an Earnings ESP of +2.82% and a Zacks Rank #3.

Freshpet FRPT has an Earnings ESP of +16.43% and a Zacks Rank #3.

Zacks’ 2020 Election Stock Report:

In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.

Check out the 2020 Election Stock Report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Freshpet, Inc. (FRPT): Free Stock Analysis Report
 
General Mills, Inc. (GIS): Free Stock Analysis Report
 
Darling Ingredients Inc. (DAR): Free Stock Analysis Report
 
MEDIFAST INC (MED): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue