Medifast (NYSE:MED) Shares Cross Above Fifty Day Moving Average – Should You Sell?

Shares of Medifast Inc (NYSE:MED) crossed above its 50-day moving average during trading on Monday. The stock has a 50-day moving average of $11.93 and traded as high as $13.41. Medifast shares last traded at $12.1170, with a volume of 306,122 shares trading hands.

Medifast News Roundup

Here are the key news stories impacting Medifast this week:

• Positive Sentiment: Medifast reported third-quarter non-GAAP loss of $0.19 per share, beating the consensus loss estimate of $0.35. Revenue of $72.05 million also exceeded expectations of approximately $71.30 million. Medifast Reports Q3 Loss, Tops Revenue Estimates
• Positive Sentiment: Fourth-quarter guidance calls for earnings per share between $0.00 and $0.25 on revenue of $55 million to $75 million, suggesting management expects to reach break-even or profitability as the Trilivy product rollout continues. Full-year revenue guidance of $280 million to $300 million was viewed as slightly better than expectations. Medifast Targets Q4 Revenue as Trilivy Rollout Continues
• Neutral Sentiment: The company ended the quarter with $172.5 million in cash, cash equivalents and investments and no debt, providing financial flexibility while it attempts to stabilize operations.
• Negative Sentiment: Third-quarter revenue declined 19.4% year over year to roughly $72 million, while active earning coaches fell 47.7% to 10,200. The company reported a GAAP net loss of $17.5 million, or $1.57 per diluted share, and projected a full-year loss of $1.80 to $2.05 per share. Medifast Reports Third-Quarter Revenue and Net Loss

Wall Street Analyst Weigh In

Several equities analysts have weighed in on MED shares. Zacks Research raised shares of Medifast from a “hold” rating to a “strong-buy” rating in a report on Tuesday, October 13th. Weiss Ratings upgraded shares of Medifast from a “sell (e+)” rating to a “sell (d)” rating in a research report on Monday, August 17th. One analyst has rated the stock with a Strong Buy rating, one has given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of “Hold” and a consensus price target of $12.00.

Medifast Price Performance

The company has a 50-day moving average price of $11.93 and a 200 day moving average price of $11.30. The firm has a market capitalization of $135.47 million, a PE ratio of -5.20 and a beta of 0.68.

Medifast (NYSE:MED) last released its quarterly earnings data on Monday, October 26th. The specialty retailer reported ($0.19) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.35) by $0.16. Medifast had a negative return on equity of 6.69% and a negative net margin of 8.08%. The firm had revenue of $72.05 million during the quarter, compared to analyst estimates of $71.30 million. As a group, research analysts anticipate that Medifast Inc will post -1.04 earnings per share for the current year.

Insider Buying and Selling

In related news, Director Parsa Kiai acquired 43,150 shares of Medifast stock in a transaction dated Wednesday, August 26th. The shares were purchased at an average price of $12.26 per share, for a total transaction of $529,019.00. Following the completion of the transaction, the director directly owned 707,492 shares in the company, valued at approximately $8,673,851.92. This represents a 6.50% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Daniel Chard sold 9,544 shares of Medifast stock in a transaction that occurred on Tuesday, September 29th. The shares were sold at an average price of $11.73, for a total transaction of $111,951.12. Following the sale, the director owned 130,609 shares in the company, valued at approximately $1,532,043.57. The trade was a 6.81% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have acquired 119,966 shares of company stock valued at $1,423,576. Insiders own 3.70% of the company’s stock.

Institutional Trading of Medifast

A number of institutional investors and hedge funds have recently bought and sold shares of MED. BlackRock Inc. purchased a new stake in Medifast in the 2nd quarter worth $3,920,000. Bank of America Corp DE purchased a new position in shares of Medifast during the second quarter valued at about $924,000. Empowered Funds LLC bought a new stake in shares of Medifast in the second quarter worth about $701,000. Great Lakes Advisors LLC bought a new stake in shares of Medifast in the second quarter worth about $548,000. Finally, GSA Capital Partners LLP bought a new stake in shares of Medifast in the second quarter worth about $408,000. 95.51% of the stock is currently owned by institutional investors.

Medifast Company Profile

Medifast, Inc (NYSE: MED) is a health and wellness company that provides weight-management products, programs and support services. Its primary brand, OPTAVIA, offers meal-replacement products, including shakes, bars, soups and other portion-controlled foods, along with structured plans intended to help customers establish healthier eating and lifestyle habits.

The company distributes its products primarily through an independent network of coaches who provide guidance, accountability and support to clients.