Disclosure: Long MED (prior analysis)
About to Get Interesting?
Medifast’s enterprise value has languished below the value of its cash and investments since early 2025. As this letter from Steamboat Capital Partners notes, the market is valuing it more dead than alive.
Is that about to change?
With an activist gaining two board seats and revenue stabilizing over the last three quarters, I think things are about to get interesting.
Steamboat Capital
Steamboat arrived on the scene with that March 19, 2026 letter laying out the case for a turnaround and disclosing a 6% stake in the company.
Then, on March 20, the company announced a cooperation agreement with Steamboat, including that the company would nominate two Steamboat principals, Parsa Kiai and Jeff Rose, to the board at the upcoming AGM, replacing two existing directors. Additionally, Steamboat agreed to a standstill and voting arrangements through the 2027 AGM.
Subsequent open market purchases during August have brought Steamboat’s stake to 7.1%.
Profitability in Sight?
Alongside the leadership transition from Dan Chard (to non-exec. chairman) to former president, Nick Johnson, Medifast replaced its flagship OPTAVIA weight loss program with a new metabolic health brand called Trilivy. There are some encouraging signs of a profitable coexistence with GLP-1s.
For starters, revenue has stabilized at $75 million over the last three quarters.
While active earning coaches declined by almost half to 11,700, revenue per earning coach increased 41% to $6,529. The company points to its historical pattern of increasing productivity leading to coach growth and ultimately to revenue growth.
The company expects to regain profitability in Q4 of this year. It launched an aptly named Catalyst program to rationalize costs across the organization, including AI-related efficiencies.
Q2 Operational Highlights
Revenue of $76.4 million, down 27.6% compared to Q2 2025
Gross profit down 30.3% to $53.4 million
Gross margin 69.9% down from 72.6%, with most of that attributed to loss of operating leverage on lower sales
Loss from operations of $4.3 million (-5.7% margin)
Free cash flow turned positive in Q2, at $728 thousand.
