Analyst action
Stephens reduced its price target for Medifast (NYSE:MED) to $12 from $15 and kept an Equal Weight rating, the firm said Wednesday. The move follows a quarter in which top-line results modestly outperformed expectations but margins came under strain.
Quarterly results and near-term drivers
Medifast reported fourth-quarter 2025 revenue of $75.1 million, narrowly above the $73.8 million consensus estimate. Despite the revenue beat, the company recorded an earnings per share loss of -$1.65, a substantial miss relative to the forecasted -$0.45.
Stephens highlighted ongoing margin pressure stemming from volume deleverage as a central concern. The firm also noted that broader market dynamics - including the adoption of GLP-1 therapies and a more value-oriented consumer - are weighing on client acquisition and the overall category momentum that supports Medifast's business.
Coach network and product strategy
Looking ahead to fiscal 2026, a critical debate centers on whether gains in coach productivity will be sufficient to stabilize total coach headcount. Stephens argued that if Medifast can grow its number of coaches while executing on product refresh initiatives, it could produce top-line momentum comparable to historical patterns.
The company is reportedly simplifying its product lineup and sharpening its metabolic health positioning to remain relevant in a market influenced by GLP-1 treatments. Stephens emphasized that while operating discipline and projected restructuring savings matter, the primary evidence of improvement will be a renewed increase in coach count.
Market reaction
Following the results and the analyst update, the stock was described as trading steady in premarket activity, lingering near its 52-week low. Stephens' downgrade of the price target, combined with the EPS shortfall, left the overall tone cautious despite the slight revenue upside.
What to watch
- Trajectories for coach headcount and coach productivity throughout fiscal 2026.
- Impact of product simplification and metabolic health positioning on client acquisition.
- Operational savings from restructuring and their contribution to margin recovery.