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, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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 6.9%. Since the same quarter one year prior, revenues rose by 16.5%. 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 $4.07 versus $3.32 in the prior year. This year, the market expects an improvement in earnings ($4.80 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.
- 49.40% is the gross profit margin for HERBALIFE LTD which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.57% is above that of the industry average.
- Net operating cash flow has increased to $137.63 million or 14.33% when compared to the same quarter last year. In addition, HERBALIFE LTD has also modestly surpassed the industry average cash flow growth rate of 6.76%.
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 $4.9 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 11.00, below the S&P 500 P/E ratio of 18.00. Shares are up 44.5% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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