The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Medifast beat slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.
Margins expanded across the board.
Medifast chalked up revenue of $91.0 million. The four analysts polled by S&P Capital IQ foresaw sales of $89.7 million on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $76.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.52. The five earnings estimates compiled by S&P Capital IQ averaged $0.40 per share. GAAP EPS of $0.52 for Q3 were 44% higher than the prior-year quarter's $0.36 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 75.1%, 90 basis points better than the prior-year quarter. Operating margin was 9.8%, 100 basis points better than the prior-year quarter. Net margin was 7.9%, 120 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $79.3 million. On the bottom line, the average EPS estimate is $0.19.
Next year's average estimate for revenue is $351.5 million. The average EPS estimate is $1.36.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 251 members out of 303 rating the stock outperform, and 52 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Medifast a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Medifast is outperform, with an average price target of $29.60.
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