Medifast, Inc. MED continues to see signs of stabilization in its business, with sequential revenue trends holding relatively steady even as the company faces pressure from a declining coach base. At its second-quarter 2026 earnings call, management said revenue has stabilized sequentially in recent quarters, aided by higher coach productivity, while improved client retention trends were another encouraging operating indicator. In the second quarter, the company reported revenues of $76.4 million, down 27.6% year over year, primarily due to a 48.7% decline in active earning coaches to approximately 11,700.
Despite the lower coach count, average revenue per active earning coach increased 41% year over year to $6,529, marking a third consecutive quarter of productivity growth. Management also said that the client referral program continues to exceed expectations as the company launches its new product line and seeks to capitalize on renewed coach enthusiasm. Management highlighted renewed energy across the coach base as coaches engage with clients around the new metabolic health narrative.
This momentum was also evident at the company’s sold-out coach convention in July, which provided a clear indication of strong coach engagement. The strong referral program performance and renewed coach enthusiasm come as the company rolls out the new product line.
Medifast’s near-term outlook follows a period of relative sequential revenue stability but continues to reflect pressure on the coach base. Management anticipates revenues of $60-$80 million in the third quarter of 2026, and they expect the active earning coach count to continue declining in the short term, while coach productivity continues to improve both year over year and sequentially. Overall, improved client retention trends and rising coach productivity are positive operating indicators as Medifast focuses on stabilizing its business.
The Zacks Rundown for MED
The Zacks Rank #2 (Buy) company's shares have gained 14.4% in the past six months against the industry’s decline of 2.7%.
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From a valuation standpoint, MED trades at a forward price-to-sales ratio of 0.47, lower than the industry’s average of 0.73.
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The Zacks Consensus Estimate for MED’s current fiscal year bottom line calls for a year-over-year decline of 26.8%, whereas the same for next fiscal year earnings suggests 54.8% growth year over year.
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MEDIFAST INC (MED): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).