Nutrisystem Investors Digest Healthy Q2 Report

During Wednesday's after-market, investors applauded Nutrisystem Inc. NTRI's earnings report, gaining hope from an upbeat outlook for the company.

Nutrisystem reported Q2 EPS of $0.54 vs. $0.50 estimates and sales of $149.8 million vs. $148.8 million estimates. The company raised FY16 sales outlook from $517 million-$532 million to $520 million-$532 million vs. $527 estimates.

Barrington's Take

Barrington Research's Matthew Gall commented on Nutrisystem's healthy earnings report, while reiterating the company's Outperform rating and $32.00-$35.00 price target.

"The core D2C business continues to perform well with an increase of 16% in the quarter to $136 million due to increased new customer starts, improving reactivation revenue, higher ASPs, product shift for the premium-priced "Uniquely Yours" offering and add-ons including shakes and transition products," stated Gall.

EPS Ramp

After the company's "solid Q2/16" results and rising margins, Gall raised nutrisystem's full year GAAP EPS estimates for FY/16 and FY/17 to $1.10 and $1.34 from $1.06 and $1.32 respectively.

According to TipRanks, Matthew Gall has a 100 percent success rate and a +17.3 percent average return per recommendation.

NutriSystem traded up 14 percent to $29.76.