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Herbalife Ltd
HLF : NYSE : Consumer Goods
$58.11 -1.00 | -1.70%
Today's Range: 57.66 - 59.46
Avg. Daily Volume: 1,295,900
10/06/15 - 12:26 PM ET

Financial Analysis

HERBALIFE LTD's gross profit margin for the second quarter of its fiscal year 2015 has increased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. HERBALIFE LTD has weak liquidity. Currently, the Quick Ratio is 0.77 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 51.39% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY15 Q2 FY14
Net Sales ($mil)1162.31306.2
EBITDA ($mil)182.4233.09
EBIT ($mil)157.3209.6
Net Income ($mil)82.8119.53

Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)749.6773.52
Total Assets ($mil)2415.12435.68
Total Debt ($mil)1683.01837.99
Equity ($mil)-196.4-404.07

Profitability Q2 FY15 Q2 FY14
Gross Profit Margin55.0452.19
EBITDA Margin15.6917.84
Operating Margin13.5316.05
Sales Turnover1.932.07
Return on Assets11.418.87
Return on Equity0.00.0
Debt Q2 FY15 Q2 FY14
Current Ratio1.331.59
Interest Expense24.824.11
Interest Coverage6.348.7

Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)92.591.8
Div / share0.00.0
Book value / share-2.12-4.4
Institutional Own % n/a n/a
Avg Daily Volume1299293.01752361.0


HOLD. This stock's P/E ratio indicates a discount compared to an average of 23.57 for the Personal Products industry and a discount compared to the S&P 500 average of 19.38. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, HERBALIFE LTD proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HLF 16.76 Peers 23.57   HLF 9.60 Peers 14.07

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HLF is trading at a significant discount to its peers.


Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HLF is trading at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
HLF 10.62 Peers 19.64   HLF 0.46 Peers 1.95

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HLF is trading at a significant discount to its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HLF trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HLF NM Peers 6.39   HLF -28.54 Peers 15.32

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HLF's P/B is negative making this valuation measure meaningless.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HLF is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HLF 1.08 Peers 1.75   HLF -7.80 Peers -0.95

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HLF is trading at a significant discount to its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HLF significantly trails its peers on the basis of sales growth



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