NEW YORK (TheStreet) -- Shares of Nu Skin Enterprises (NUS) - Get Nu Skin Enterprises, Inc. Class A Report are down by 20.55% to $37 in mid-morning trading on Wednesday, after the beauty products manufacturer provided weak guidance and cut its third quarter revenue forecast.
The company now expects to generate between $570 million and $573 million in third quarter revenue, a steep decline from the as much as $620 million the company had previously forecast.
Analysts on average are expecting the company to report third quarter revenue of $622.6 million.
Currency headwinds as well as weakness in its Chinese sector are responsible for the depressed outlook, Nu Skin Enterprises said.
The stock dropped sharply in after-hours trading yesterday after closing the day at $46.57.
Separately, TheStreet Ratings team rates NU SKIN ENTERPRISES as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate NU SKIN ENTERPRISES (NUS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Personal Products industry. The net income increased by 128.9% when compared to the same quarter one year prior, rising from $19.51 million to $44.66 million.
- Net operating cash flow has significantly increased by 451.96% to $85.40 million when compared to the same quarter last year. In addition, NU SKIN ENTERPRISES has also vastly surpassed the industry average cash flow growth rate of 36.75%.
- NUS's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.
- NU SKIN ENTERPRISES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NU SKIN ENTERPRISES reported lower earnings of $3.11 versus $5.94 in the prior year. This year, the market expects an improvement in earnings ($3.62 versus $3.11).
- You can view the full analysis from the report here: NUS