Medifast Shares Plummet as Business Scrambles to Adapt to Industry Changes

By Tamara Parker • Wednesday, February 21 11:47 • Permanent Link

Medifast, the health and wellness company known for its habit-based and coach-guided lifestyle solution, Optavia®, has released its financial results for the fourth quarter and full year ended December 31, 2023. The company reported fourth quarter 2023 revenue of $191.0 million, with revenue per active earning coach of $4,648, and independent active earning Optavia coaches of 41,100. The company also reported net income of $6.0 million (non-GAAP adjusted net income of $11.9 million) and earnings per diluted share ("EPS") of $0.55 (non-GAAP adjusted EPS of $1.09).

For the full year 2023, Medifast reported revenue of $1.1 billion and net income of $99.4 million (non-GAAP adjusted net income of $105.2 million), with EPS of $9.10 (non-GAAP adjusted EPS of $9.64). The company's cash, cash equivalents, and investments totaled $150.0 million with no interest-bearing debt as of December 31, 2023.

Dan Chard, Chairman and CEO of Medifast, commented on the company's performance and future outlook, stating, "We are realigning our business to respond to the evolving dynamics of the weight loss industry and to aggressively execute on bold initiatives to transform our business model. We are broadening our customer acquisition activities significantly, launching a broad-based national marketing effort and leaning into the medically-supported weight loss market through our collaboration with LifeMD. This remains a challenging market, and it will take time to navigate the transformational path that we are on. However, I believe that the investments we’re making in our business will broaden our addressable market and strengthen our ability to drive future growth."

The company also provided its outlook, expecting first quarter 2024 revenue to be in the range of $155 million to $175 million and first quarter 2024 diluted EPS to be in the range of $0.25 to $0.95.

Looking at the market performance, the company's shares have moved -14.6%, and are currently trading at a price of $41.79.

The full 8-K submission by Medifast is available here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.