Medifast (NYSE:MED) Stock Price Crosses Above Fifty Day Moving Average - What's Next?

Key Points

• Medifast shares rose above their 50-day moving average, reaching $13.41 before trading near $12.12, compared with a 50-day average of $11.93.
• Third-quarter results beat expectations, with a non-GAAP loss of $0.19 per share and revenue of $72.05 million, while fourth-quarter guidance anticipates revenue of $55 million to $75 million and possible break-even profitability.
• Underlying challenges remain significant: revenue fell 19.4% year over year, active earning coaches dropped 47.7%, and the company posted a $17.5 million GAAP net loss. Analysts have an average Hold rating and a $12 consensus price target.

Medifast Inc (NYSE:MED - Get Free Report) shares passed above its 50-day moving average during trading on Monday. The stock has a 50-day moving average of $11.93 and traded as high as $13.41. Medifast shares last traded at $12.1170, with a volume of 306,122 shares.

More Medifast News

Here are the key news stories impacting Medifast this week:

• Positive Sentiment: Medifast reported third-quarter non-GAAP loss of $0.19 per share, beating the consensus loss estimate of $0.35. Revenue of $72.05 million also exceeded expectations of approximately $71.30 million. Medifast Reports Q3 Loss, Tops Revenue Estimates
• Positive Sentiment: Fourth-quarter guidance calls for earnings per share between $0.00 and $0.25 on revenue of $55 million to $75 million, suggesting management expects to reach break-even or profitability as the Trilivy product rollout continues. Full-year revenue guidance of $280 million to $300 million was viewed as slightly better than expectations. Medifast Targets Q4 Revenue as Trilivy Rollout Continues
• Neutral Sentiment: The company ended the quarter with $172.5 million in cash, cash equivalents and investments and no debt, providing financial flexibility while it attempts to stabilize operations.
• Negative Sentiment: Third-quarter revenue declined 19.4% year over year to roughly $72 million, while active earning coaches fell 47.7% to 10,200. The company reported a GAAP net loss of $17.5 million, or $1.57 per diluted share, and projected a full-year loss of $1.80 to $2.05 per share. Medifast Reports Third-Quarter Revenue and Net Loss

Analyst Upgrades and Downgrades

MED has been the topic of a number of analyst reports. Weiss Ratings raised Medifast from a "sell (e+)" rating to a "sell (d)" rating in a research report on Monday, August 17th. Zacks Research raised Medifast from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, October 13th. One analyst has rated the stock with a Strong Buy rating, one has given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus target price of $12.00.

Medifast Trading Up 2.1%

The stock's 50 day moving average is $11.93 and its 200-day moving average is $11.30. The company has a market cap of $135.47 million, a P/E ratio of -5.20 and a beta of 0.68.

Medifast (NYSE:MED - Get Free Report) last released its quarterly earnings data on Monday, October 26th. The specialty retailer reported ($0.19) earnings per share for the quarter, beating analysts' consensus estimates of ($0.35) by $0.16. The business had revenue of $72.05 million during the quarter, compared to analyst estimates of $71.30 million. Medifast had a negative net margin of 8.08% and a negative return on equity of 6.69%. As a group, sell-side analysts forecast that Medifast Inc will post -1.04 EPS for the current year.

Insider Activity at Medifast

In other news, Director Daniel R. Chard sold 9,545 shares of the business's stock in a transaction on Monday, September 28th. The stock was sold at an average price of $11.98, for a total value of $114,349.10. Following the completion of the transaction, the director owned 140,153 shares in the company, valued at $1,679,032.94. The trade was a 6.38% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Parsa Kiai purchased 43,150 shares of the stock in a transaction dated Wednesday, August 26th. The shares were acquired at an average cost of $12.26 per share, for a total transaction of $529,019.00. Following the completion of the acquisition, the director owned 707,492 shares of the company's stock, valued at approximately $8,673,851.92. This represents a 6.50% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Insiders purchased a total of 119,966 shares of company stock worth $1,423,576 over the last ninety days. 3.70% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Medifast

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. Engineers Gate Manager LP boosted its position in Medifast by 25.9% in the second quarter. Engineers Gate Manager LP now owns 49,829 shares of the specialty retailer's stock worth $529,000 after purchasing an additional 10,249 shares during the last quarter. Squarepoint Ops LLC purchased a new position in shares of Medifast during the 2nd quarter worth $214,000. Chico Wealth RIA bought a new stake in shares of Medifast during the 2nd quarter valued at $223,000. Ancora Advisors LLC bought a new stake in shares of Medifast during the 2nd quarter valued at $75,000. Finally, Empowered Funds LLC bought a new stake in shares of Medifast during the 2nd quarter valued at $701,000. Institutional investors own 95.51% of the company's stock.

About Medifast

Medifast, Inc NYSE: MED is a health and wellness company that provides weight-management products, programs and support services. Its primary brand, OPTAVIA, offers meal-replacement products, including shakes, bars, soups and other portion-controlled foods, along with structured plans intended to help customers establish healthier eating and lifestyle habits.

The company distributes its products primarily through an independent network of coaches who provide guidance, accountability and support to clients.

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