Is Medifast, Inc. overvalued or undervalued?

As of 28 April 2025, the valuation grade for Medifast, Inc. has moved from attractive to risky, indicating a significant deterioration in its financial outlook. The company is currently overvalued, with a P/E ratio of NA due to losses, a Price to Book Value of 0.66, and an EV to EBIT of 2.98. Notably, the company's ROE stands at -0.84%, reflecting ongoing challenges in generating returns on equity.
In comparison to its peers, Medifast's valuation metrics are concerning. OPENLANE, Inc. has a fair valuation with a P/E of 21.56, while Thoughtworks Holding, Inc. is also classified as risky with a P/E of -25.45. Medifast's stock has underperformed significantly, with a year-to-date return of -24.46%, compared to a 2.44% gain in the S&P 500, further reinforcing the notion that the company is overvalued in its current state.