Medifast Inc (NYSE: MED)

Sector: Consumer Cyclical Industry: Personal Services CIK: 0000910329
Market Cap 118.62 Mn
P/B 0.60
P/E -6.35
P/S 0.31
ROIC (Qtr) -18.49
Div Yield % 0.00
Rev 1y % (Qtr) -36.90
Total Debt (Qtr) 10.69 Mn
Debt/Equity (Qtr) 0.05
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About

Medifast, Inc., often referred to as Medifast, is a prominent player in the health and wellness industry, operating under the brand name OPTAVIA. The company has established a strong presence, having grown into a billion-dollar brand, and is recognized for its well-capitalized business model. Medifast is particularly known for its leadership in the U.S. weight management industry, where it has built a network of over 41,100 active earning independent OPTAVIA Coaches, impacting more than 3 million customers. Medifast's primary business activities...

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Investment thesis

Bull case

  • Strong operating cash flow of 6.86M provides robust 0.64x coverage of total debt 10.69M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 89.30M provide 19.40x coverage of short-term debt 4.60M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 247.97M provides 23.19x coverage of total debt 10.69M, indicating robust asset backing and low credit risk.
  • Retained earnings of 158.27M provide full 25.98x coverage of long-term debt 6.09M, indicating strong internal capital position.
  • Cash reserves of 89.30M provide robust 2.08x coverage of current liabilities 42.96M, indicating strong short-term solvency.

Bear case

  • Operating cash flow of 6.86M barely covers its investment activities of (7.93M), with a coverage ratio of -0.87, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 6.86M provides thin coverage of dividend payments of (195000) with a -35.19 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 6.86M shows concerning coverage of stock compensation expenses of 7.64M, with a 0.90 ratio indicating potential earnings quality issues.
  • Operating earnings of (5.64M) show weak coverage of depreciation charges of 18.87M, with a -0.30 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.25M provides weak coverage of capital expenditures of 5.61M, with a 0.22 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Personal Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ROL Rollins Inc 29.03 Bn 55.12 7.72 1.04 Bn
2 SCI Service Corp International 11.40 Bn 21.01 2.65 5.14 Bn
3 HRB H&R Block Inc 4.26 Bn 6.94 1.12 2.94 Bn
4 FTDR Frontdoor, Inc. 4.22 Bn 16.06 2.07 1.20 Bn
5 BFAM Bright Horizons Family Solutions Inc. 3.89 Bn 19.41 1.35 1.75 Bn
6 CSV Carriage Services Inc 0.80 Bn 65.55 3.90 0.56 Bn
7 EM Smart Share Global Ltd 0.26 Bn -141.13 1.01 -
8 MED Medifast Inc 0.12 Bn -6.35 0.31 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.13 1.18
EV to Cash from Ops. EV/CFO 4.57 11.38
EV to Debt EV to Debt 2.93 3.64
EV to EBIT EV/EBIT -5.56 -48.48
EV to EBITDA EV/EBITDA 6.74 6.52
EV to Free Cash Flow [EV/FCF] EV/FCF 25.11 8.27
EV to Market Cap EV to Market Cap 0.26 3.43
EV to Revenue EV/Rev 0.08 1.80
Price to Book Value [P/B] P/B 0.60 3.15
Price to Earnings [P/E] P/E -6.35 2.58
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -95.75 -5.41
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -14.53
Dividend per Basic Share Div per Share (Qtr) 0.00 0.26
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.14
Interest Coverage Int. cover (Qtr) 0.00 0.71
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 24.68 13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -1.79 44.85
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.63
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -992.97 -83.44
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -76.82 1.88
EBIT Growth (1y) % EBIT 1y % (Qtr) -248.90 -59.36
EBT Growth (1y) % EBT 1y % (Qtr) -248.90 -71.50
EPS Growth (1y) % EPS 1y % (Qtr) -994.74 -98.14
FCF Growth (1y) % FCF 1y % (Qtr) -92.66 -22.56
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -38.11 9.00
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.56 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.02 0.05
Cash Ratio Cash Ratio (Qtr) 2.08 1.89
Current Ratio Curr Ratio (Qtr) 4.69 3.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.05 1.99
Interest Cover Ratio Int Coverage (Qtr) 0.00 0.71
Times Interest Earned Times Interest Earned (Qtr) 0.00 0.71
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.40 7.38
EBIT Margin % EBIT Margin % (Qtr) -1.46 0.88
EBT Margin % EBT Margin % (Qtr) -1.46 -9.97
Gross Margin % Gross Margin % (Qtr) 71.30 31.03
Net Profit Margin % Net Margin % (Qtr) -4.80 -8.73