NEW YORK (TheStreet) -- Herbalife (HLF) - Get Report stock spiked 20.52% to $55.15 on heavy volume in Friday's trading session after announcing that it had begun discussions with the Federal Trade Commission about a potential resolution to a probe that the company disclosed in 2014.
The FTC began investigating whether Herbalife is a pyramid scheme after billionaire investor Bill Ackman announced in 2012 that he was shorting the company and viewed it as an illegal business, according to Bloomberg.
Although Herbalife conceded that the timing or outcome of its discussions with the FTC are unclear, shares shot up today on investor optimism that the dispute might end without further damages, Bloomberg notes.
Additionally, the global nutrition company reported 2015 fourth quarter adjusted earnings of $1.19 cents per share on revenue of $1.1 billion.
Analysts surveyed by Thomson Reuters had forecast for earnings of 94 cents per share on $1.06 billion in revenue.
Herbalife now expects to report 2016 earnings between $4.05 and $4.50 per share, down from previous guidance between $4.35 and $4.75 per share. Its forecast reflects a currency headwind of roughly 80 cents per share compared to the year-ago period.
About 7.76 million shares of Herbalife were traded today, well above the company's average trading volume of roughly 1.67 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Herbalife's strengths such as its solid stock price performance, increase in net income and good cash flow from operations are countered by the fact that revenues have generally been declining.
You can view the full analysis from the report here: HLF
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.