Can Medifast's Coach Productivity Gains Help Revive Revenue Growth?

Medifast, Inc.’s MED revenues have stabilized sequentially over recent quarters, supported by higher coach productivity, which increased for the third consecutive time in the second quarter of fiscal 2026. The company views coach productivity as an important metric because positive trends in this area have historically preceded revenue and profitability growth. In the second quarter of fiscal 2026, revenues reached $76.4 million, in line with the guidance provided in May.

Although the number of active earning coaches continues to decline, active earning coach productivity has shown meaningful improvement, increasing 41% year over year. Revenue per active earning coach reached its highest level since the second quarter of 2022, at $6,529 for the second quarter, highlighting the continued improvement in productivity. The company expects this trend to continue through 2026, with management also forecasting further year-over-year and sequential productivity growth in the third quarter.

The improvement is also reflected in the growing percentage of active earning coaches reaching the executive director rank or above. Management said that this percentage continues to climb and remains above its 10% benchmark for a healthy, scalable field organization, as the field embraces the company's strategic transition toward metabolic health. Continued improvement in coach productivity and the development of higher-producing executive directors remain important parts of the company's strategy.

At its last earnings call, Medifast highlighted that stronger coach productivity and improved client retention are providing encouraging signs of stabilization across the business. These improvements are consistent with management's view that key operating indicators are starting to turn more positive, while the company expects continued productivity improvement as it works toward a return to profitability in the fourth quarter of 2026.

The Zacks Rundown for MED

The company's shares have gained 8.2% in the past six months against the industry’s decline of 8.4%. MED currently carries a Zacks Rank #3 (Hold).

Image Source: Zacks Investment Research

From a valuation standpoint, MED trades at a forward price-to-sales ratio of 0.48, lower than the industry’s average of 0.80.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for MED’s current fiscal year earnings implies a year-over-year decline of 140.2%, and the same for next fiscal year earnings implies 4.1% growth year over year.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks have been discussed below:

Darling Ingredients Inc. DAR develops, produces, and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. DAR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DAR’s current fiscal-year sales and earnings implies growth of 12.8% and 926.5%, respectively, from the year-ago actuals. DAR delivered a trailing four-quarter negative earnings surprise of 38.9%, on average.

The Chef’s Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. CHEF currently carries a Zacks Rank #1.

The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings indicates growth of 10.8 and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.

US Foods Holding Corporation USFD, together with its subsidiaries, markets, sells and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for US Foods’ current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago actuals. USFD delivered a trailing four-quarter earnings surprise of 1.5%, on average.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research