Medifast: Coach Surge Fuels Growth

2025-07-03 02:48:59 ET

Revenue Momentum Too Strong for Street

We initiate coverage on Medifast, Inc. (MED) with a Strong Buy rating and a $56 PT. Medifast, Inc. manufactures and distributes weight management products and nutritional products, primarily under the OPTAVIA and other brand names through its market-leading e-commerce platform to clients in the United States, as well as in Asia-Pacific. With consensus narratives anchored to backward-looking headwinds, a misperception-reality disconnect is our opportunity, where recent tangible operational inflection points go largely unnoticed by the street: (1) sequential stabilization in revenue/coach, and (2) a surge in new coach sign-ups that positions Medifast to inflect back to growth by FY26, levels we forecast at $475m (+26% ahead of Street). We see ASCEND’s GLP-1 support rollout, driving mid-teens order mix at price parity, as an obvious catalyst of structurally improved client engagement and LTV, yet still missing from most sell-side models. And, we see silently building reorder tailwinds from digital client engagement tools set for Q4-25 deployment as another several points of FY26 revenue momentum....

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