Jun 13, 2022
Price-performance should be expected within the range of $165 to $190.
Investors should trade the stock within the range.
Medifast Inc (NYSE:MED) is a consumer defensive value stock. Investors would consider buying and holding for the bear market. This analysis considers the price at which you would buy Medifast.
The company operates in the health and wellness sector. Its business model involves direct-selling of its products through its wellness community known as OPTAVIA. As a healthy lifestyle continues to be a concern, Medifast is expected to continue growing.
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Financial analysis indicates that the company is fundamentally strong. Medifast has an ROE of 84.29%. The ROA is recorded at 44.06%. The EPS for the company is $14 with the PE at 13.66. The rates of return together with the price-performance show that the stock is attractive.
Medifast faces resistance at $190 as the price consolidates
Source – TradingView
Technical analysis shows that Medifast has been consolidating between $165 support and $190 resistance. It has been at these levels since January. The current price is $180. Investors, therefore, ask whether it is worth investing in the company at the prevailing prices.
Since the market is bearish, Medifast may not rise above the resistance of $190 anytime soon. The valuation would also be expected to remain within the consolidation range. From the current level of $180, the price can be expected to fall lower to the support level. Investors should therefore wait for the stock at $165 before buying.
We recommend buying Medifast Inc at $165 and selling at $190. Strong fundamentals will sustain the valuation of the consumer defensive value stock within the range. It is unlikely that the stock will rise above $190.
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