Medifast Inc (NYSE:MED) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of MED, it is a financially-robust company with a great history and a buoyant growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Medifast here.
Exceptional growth potential with outstanding track record
MED is an attractive stock for growth-seeking investors, with an expected earnings growth of 28% in the upcoming year. This growth in the bottom-line is bolstered by an impressive top-line expansion of 79% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. Over the past year, MED has grown its earnings by 93%, with its most recent figure exceeding its annual average over the past five years. This illustrates a strong track record, leading to a satisfying return on equity of 42%. which paints a buoyant picture for the company.
MED’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that MED manages its cash and cost levels well, which is a key determinant of the company’s health. Investors should not worry about MED’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Medifast, I’ve compiled three fundamental factors you should look at:
- Valuation: What is MED worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MED is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does MED return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from MED as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MED? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.