Medifast: Coach Surge Fuels Growth

We initiate coverage on MED with a Strong Buy rating and a $56 PT. Medifast, Inc. manufactures and

distributes weight management products and nutritional products, primarily under the OPTAVIA and other brand names through its market-leading e-commerce platform to clients in the United States, as well as in Asia-Pacific. With consensus narratives anchored to backward-looking headwinds, a misperception-reality disconnect is our opportunity, where recent tangible operational inflection points go largely unnoticed by the street: (1) sequential stabilization in revenue/coach, and (2) a surge in new coach sign-ups that positions Medifast to inflect back to growth by FY26, levels we forecast at $475m (+26% ahead of Street). We see ASCEND’s GLP-1 support rollout, driving mid-teens order mix at price parity, as an obvious catalyst of structurally improved client engagement and LTV, yet still missing from most sell-side models. And, we see silently building reorder tailwinds from digital client engagement tools set for Q4-25 deployment as another several points of FY26 revenue momentum. Our valuation foundation rests on a forward P/S multiple of 1.3x, selectively below MED's LT average and sector comps, and a reasonable bridge between credible revenue recovery and realistic margin normalization. We acknowledge execution risk (regulatory developments & ongoing margin compression), but see downside as limited by a rock-bottom base case already in MED's $154m market cap. At current levels, risk/reward is so asymmetric, we see even modest operational traction leading to outsized rerating, with the bear case the opposite of a "show-me" story, making