Herbalife Ltd

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HLF : NYSE : Consumer Goods
$61.95 | %
Today's Range: 61.29 - 62.31
Avg. Daily Volume: 1085900.0
08/18/17 - 4:01 PM ET

Financial Analysis


HERBALIFE LTD's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. HERBALIFE LTD has strong liquidity. Currently, the Quick Ratio is 1.99 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 463.38% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)1146.91201.8
EBITDA ($mil)199.8187.7
EBIT ($mil)175.7163.7
Net Income ($mil)137.6-22.9


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)1624.1936.7
Total Assets ($mil)3410.02613.9
Total Debt ($mil)2288.41426.6
Equity ($mil)200.035.5


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin55.2254.32
EBITDA Margin17.4215.61
Operating Margin15.3213.62
Sales Turnover1.31.73
Return on Assets12.029.6
Return on Equity204.95707.04
Debt Q2 FY17 Q2 FY16
Current Ratio2.631.14
Debt/Capital0.920.98
Interest Expense41.924.6
Interest Coverage4.196.65


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)90.293.0
Div / share0.00.0
EPS1.61-0.28
Book value / share2.220.38
Institutional Own % n/a n/a
Avg Daily Volume1011437.01159442.0

Valuation


BUY. HERBALIFE LTD's P/E ratio indicates a significant discount compared to an average of 28.26 for the Personal Products industry and a significant discount compared to the S&P 500 average of 24.31. For additional comparison, its price-to-book ratio of 29.51 indicates a significant premium versus the S&P 500 average of 3.03 and a significant premium versus the industry average of 8.63. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, HERBALIFE LTD seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HLF 13.77 Peers 28.26   HLF 21.38 Peers 20.33

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HLF is trading at a significant discount to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HLF is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HLF 12.30 Peers 22.79   HLF 0.25 Peers 0.80

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HLF is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HLF trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HLF 29.51 Peers 8.63   HLF 63.23 Peers 13.13

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HLF is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

HLF is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HLF 1.34 Peers 2.69   HLF -2.36 Peers 5.85

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HLF is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HLF significantly trails its peers on the basis of sales growth

 

 

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