Since January 2026, Medifast has been in a holding pattern, posting a small return of 3.3% while floating around $11.05.

Is now the time to buy Medifast, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think Medifast Will Underperform?

We’re cautious about Medifast. Here are three reasons why there are better opportunities than MED, plus one stock we’d rather own.

1. Revenue Spiraling Downwards

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Medifast’s demand was weak over the last three years as its sales fell at a 39.1% annual rate. This was below our standards and is a sign of poor business quality.

2. Fewer Distribution Channels Limit Its Ceiling

With $346.1 million in revenue over the past 12 months, Medifast is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for Medifast, its EPS and revenue declined by 28.9% and 39.1% annually over the last three years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Medifast’s low margin of safety could leave its stock price susceptible to large downswings.

Final Judgment

We see the value of companies helping consumers, but in the case of Medifast, we’re out. That said, the stock currently trades at $11.05 per share (or a forward price-to-sales ratio of 0.4×). The market typically values companies like Medifast based on their anticipated profits for the next 12 months, but it expects the business to lose money. We also think the upside isn’t great compared to the potential downside here - there are more exciting stocks to buy. We’d recommend looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.

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