Why Did Medifast Plunge 11.98% on Earnings Miss?

On April 7, 2025, Medifast's stock experienced a significant drop of 11.98% in pre-market trading, reflecting a notable shift in investor sentiment towards the wellness company.

Medifast reported a 37.7% year-over-year decline in sales to $119 million for the fourth quarter of 2024, despite exceeding Wall Street's revenue expectations. This decline in sales could be a contributing factor to the recent drop in stock price, as investors may be concerned about the company's financial performance and future prospects.

Medifast's short interest stands at 1.29 million shares, representing 12.12% of the float. This high level of short interest suggests that a significant number of investors are betting against the company, which could further exacerbate the downward pressure on the stock price.

American Century Companies Inc. increased its position in Medifast by 3.4% in the fourth quarter, indicating that some investors remain bullish on the company's long-term prospects. However, this increase in position may not be enough to offset the negative sentiment surrounding the company's recent financial performance and high short interest.