Medifast, Inc. (MED) Stock: Here’s Why It’s Falling


Medifast, Inc. (MED) is headed down in the market today. The company, one that is focused in the service sector, is presently trading at $143.67 after tumbling -5.03% so far today. When it comes to service companies, there are a number of aspects that have the potential to generate declines in the market. News is one of the most common reasons for movement. Here are the most recent stories centered around MED:

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May-02-19 03:58PM Edited Transcript of MED earnings conference call or presentation 1-May-19 8:30pm GMT
12:23AM Medifast (MED) Q1 2019 Earnings Call Transcript
May-01-19 07:42PM Hedge Funds Have Never Been More Bullish On Medifast, Inc. (MED)
07:05PM Medifast (MED) Q1 Earnings and Revenues Top Estimates
05:56PM Medifast: 1Q Earnings Snapshot

Nonetheless, any time investors are making a decision to invest, prospective investors should focus on much more than news, this is especially the case in the ever complex service space. Here’s what’s happening in regard to Medifast, Inc..

Performance Trends That We’ve Seen From MED

While a move down in a single session, like what we’re seeing from Medifast, Inc. may lead to fear in some investors, a single session move by itself shouldn’t be the reason for a decision to, or not to, invest in a stock. It is generally important to take a look at trends experienced by the stock just a single session. When it comes to MED, here are the returns that investors have seen:

  • Past 5 Sessions – In the last seven days, MED has seen a price change amounting to -5.88%.
  • Past Month – The return from Medifast, Inc. over the past 30 days works out to 10.88%.
  • Quarterly – Over the past three months, the stock has generated a return on investment that works out to 12.91%
  • Past 6 Months – Over the previous 6 months, we’ve seen a change that works out to -29.22% from the stock.
  • YTD – Since the close of last year MED has resulted in a ROI of 14.92%.
  • Full Year – Lastly, in the past year, investors have seen a change that works out to 48.48% from MED. Throughout this period of time, the stock has sold at a high of -44.95% and a low of 49.84%.

Ratios Worth Watching

Looking at a few ratios having to do with a company can give investors a look of how dangerous and/or potentially profitable a an investment option might be. Below are some of the important ratios to think about when looking at MED.

Short Ratio – The short ratio is a tool that’s used to measure the level of short interest. As the ratio heads up, it shows that more investors are expecting that the value of the stock is going to tumble. Throughout the sector, strong service stocks can have a lower short ratio. On the other hand, we tend to see quite a few short squeezes in the sector. Nonetheless, when it comes to Medifast, Inc., it’s short ratio is 6.97.

Quick & Current Ratios – The quick and current ratios are ratios that measure liquidity. Essentially, they measure whether or not a company can pay for its debts when they mature based on quick assets or current assets. do have strong quick and current ratios. In terms of MED, the quick and current ratios add up to 1.80 and 2.40 respectively.  

Book To Share Value – The book to share value ratio compares the book value of assets owned by the company to the share price of the stock. In this particular case, the book to share value ratio equates to 9.27.

Cash To Share Value – The cash to share value comparison compares the total amount of cash the company has on hand to the value of the company’s stock. In this case, the cash to share value ratio works out to 8.63.

What Institutions And Insiders Think Of Medifast, Inc.

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in MED, here’s what we’re seeing:

Institutions own 97.60% of the company. Institutional interest has moved by 1.33% over the past three months. When it comes to insiders, those who are close to the company currently own 3.30% percent of MED shares. Institutions have seen ownership changes of an accumulative -7.17% over the last three months.

What Analysts Say About Medifast, Inc.

While it’s rarely a smart idea to avoid doing your DD and blindly following the thoughts of analysts, it is a smart idea to consider their thoughts when validating your own before making investment decisions in the service sector. Below you’ll find the most recent moves that we’ve seen from analysts as it relates to MED.

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Nov-08-18 Upgrade Sidoti Neutral → Buy
Mar-07-18 Upgrade Sidoti Neutral → Buy
Sep-15-17 Reiterated DA Davidson Buy $65 → $74
Aug-04-16 Reiterated Wunderlich Hold $32 → $36
Jan-11-16 Upgrade Sidoti Neutral → Buy

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $8.11. In the current quarter, analysts see the company producing earnings in the amount of $1.54. Over the last 5 years, MED has generated revenue in the amount of $9.10% with earnings coming in at 18.70%. On a quarter over quarter basis, earnings have seen movement of 105.50% and revenue has seen movement of 86.90%.

How Many Shares Of MED Are Available?

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 11.71M shares of Medifast, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, MED has a float of 11.43M.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to MED, the short percent of the float is 16.16%.

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