Financial Comparison: e.l.f. Beauty (NYSE:ELF) and Medifast (NYSE:MED)

Medifast (NYSE:MED) and e.l.f. Beauty (NYSE:ELF) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares Medifast and e.l.f. Beauty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	-8.08%	-6.69%	-5.25%
e.l.f. Beauty	3.38%	14.07%	6.81%

Earnings and Valuation

This table compares Medifast and e.l.f. Beauty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$385.79 million	0.36	-$18.67 million	($2.33)	-5.37
e.l.f. Beauty	$1.64 billion	3.87	$26.32 million	$1.00	107.30

e.l.f. Beauty has higher revenue and earnings than Medifast. Medifast is trading at a lower price-to-earnings ratio than e.l.f. Beauty, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Medifast has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, e.l.f. Beauty has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Medifast and e.l.f. Beauty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	2	0	0	1.67
e.l.f. Beauty	1	5	10	2	2.72

Medifast presently has a consensus target price of $12.00, suggesting a potential downside of 4.08%. e.l.f. Beauty has a consensus target price of $92.12, suggesting a potential downside of 14.14%. Given Medifast’s higher possible upside, equities analysts clearly believe Medifast is more favorable than e.l.f. Beauty.

Insider and Institutional Ownership

95.5% of Medifast shares are held by institutional investors. Comparatively, 92.4% of e.l.f. Beauty shares are held by institutional investors. 3.7% of Medifast shares are held by insiders. Comparatively, 3.5% of e.l.f. Beauty shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

e.l.f. Beauty beats Medifast on 12 of the 15 factors compared between the two stocks.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

About e.l.f. Beauty

e.l.f. Beauty, Inc. is a holding company, which engages in the provision of inclusive, accessible, clean, vegan and cruelty free cosmetics and skin care products. The company focuses on the e-commerce, national retailers and international business channels. Its brands include elf, elf skin, WELL People and KEYS soulcare. The company was founded in 2004 and is headquartered in Oakland, CA.