Why Medifast (MED) Shares Are Trading Lower Today

What Happened:

Shares of wellness company Medifast (NYSE:MED) fell 26.8% in the morning session after the company reported first quarter results that narrowly topped analysts' revenue expectations. However, revenue declined 48% in absolute terms, primarily driven by a decline in active earning OPTAVIA Coaches as well as lower Coach productivity. The company also called out a $9.1 million headwind due to timing differences from changes to sales order terms. Looking ahead, guidance was weak. The company's revenue and EPS guidance for next quarter missed analysts' expectations by a large amount, and its operating margin missed Wall Street's estimates. Overall, the results were highly disappointing.

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What is the market telling us:

Medifast's shares are not very volatile than the market average and over the last year have had only 18 moves greater than 5%. Moves this big are very rare for Medifast and that is indicating to us that this news had a significant impact on the market's perception of the business.

Medifast is down 61.1% since the beginning of the year, and at $27.30 per share it is trading 74.5% below its 52-week high of $107.06 from July 2023. Investors who bought $1,000 worth of Medifast's shares 5 years ago would now be looking at an investment worth $186.17.

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