Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HERBALIFE LTD has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HERBALIFE LTD increased its bottom line by earning $3.32 versus $2.40 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $3.32).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Personal Products industry average. The net income increased by 19.9% when compared to the same quarter one year prior, going from $111.18 million to $133.37 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Personal Products industry and the overall market, HERBALIFE LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 49.50% is the gross profit margin for HERBALIFE LTD which we consider to be strong. Regardless of HLF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HLF's net profit margin of 12.90% compares favorably to the industry average.
Herbalife Ltd., a network marketing company, sells weight management, nutritional supplement, energy, sports and fitness, and personal care products worldwide. The company has a P/E ratio of 13.8, below the average drugs industry P/E ratio of 14 and below the S&P 500 P/E ratio of 17.7. Herbalife has a market cap of $5.81 billion and is part of the
industry. Shares are down 0.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.