The company reported a 73% increase in second quarter earnings to $1.6 million and a 25% increase in revenue to $27.5 million. On a diluted earnings per share basis, earnings increased 57% to 11 cents from 7 cents last year. Gross margins improved by 20 basis points to 75.8% when compared to 75.6% in the same quarter last year. The company expects to meet or exceed its full year expectations of 8 to 10% revenue growth and 30 to 35% EPS growth. Medifast seems to be back on track now in terms of earnings growth and while revenue is also growing, it is nowhere near the levels the company experienced in 2006. As investors in bigger competitor Nutrisystem (NTRI) will tell you, any growth in this industry at this point in the economic cycle is remarkable. Nutrisystem lost more than 60% of its value over the last year due to falling revenue and earnings. The company now trades at a forward P/E of 8.75 compared to Medifast's forward P/E of 15.94, which is based on analyst expectations of 39% earnings growth. Medifast appears to be fairly valued at these levels but momentum traders, a potential acquisition by Nutrisystem or continued growth from their indirect sales channel Take Shape For Life could take the stock much higher.