Summary
- Nutrisystem beat market expectations slightly by delivering $191M revenue and $26.1M net income in Q2 18.
- The company managed its operating expenses well which somewhat alleviated continuing pressure on margins. There was no revenue growth as expected.
- Post Q2 earnings, we continue to believe the stock trades at high multiples. Investors should look for a better entry point to buy into 2019 growth and margin improvement.
Nutrisystem (NTRI) managed its operating expenses well while facing continuing margin pressure Q2 18. Overall, financial results were slightly better than market expectations. We stick to our previous view that Nutrisystem is somewhat overvalued at current multiples. Prudent investors should wait for a better entry point to leverage the growth and margin improvement the company is likely to deliver in 2019.
