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, good cash flow from operations and increase in net income. 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:
- HLF's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 19.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HERBALIFE LTD has improved earnings per share by 22.1% 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 $4.07 versus $3.32 in the prior year. This year, the market expects an improvement in earnings ($4.65 versus $4.07).
- 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.
- Net operating cash flow has increased to $167.89 million or 45.10% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 23.23%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Personal Products industry average. The net income increased by 11.9% when compared to the same quarter one year prior, going from $105.36 million to $117.88 million.
Herbalife Ltd., a network marketing company, sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, and personal care products worldwide. Herbalife has a market cap of $3.84 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 9.2, below the S&P 500 P/E ratio of 17.7. Shares are up 14.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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