MED

Medifast is a structurally impaired business trading like a liquidation. Revenue has collapsed from $1.60B (FY2022) to $386M (FY2025) — down 36% in the last year alone and roughly 76% from peak — as GLP-1 weight-loss drugs (Wegovy/Ozempic) have hollowed out demand for the OPTAVIA meal-replacement program. FY2025 tipped into losses: net income -$18.7M (vs +$2.09M) and operating income -$14.2M, so this is no longer a shrinking-but-profitable cash cow. The MD&A confirms self-inflicted headwinds too — the company discontinued its customer reward program in July 2025 and is shedding real estate (it listed and, in February 2026, closed the sale of its Ridgely, MD distribution facility), the moves of a company right-sizing to a much smaller footprint rather than one positioned to re-accelerate.

What keeps this from an outright sell/avoid is the balance sheet and price. The company carries no long-term debt, $89.3M cash, $199M equity and a 4.7x current ratio (current assets $202M vs current liabilities $43M). At a $120M market cap the stock trades below book value and at only ~1.35x net cash, so a large slug of the enterprise value is covered by liquid assets and tangible property. Gross margin is still an impressive 71.3%, and despite the net loss the company generated positive operating cash flow of $6.86M (net loss is largely non-cash — D&A was $14.2M), so it is not yet burning through its cushion. P/S of 0.3x prices in continued deterioration.