Herbalife Ltd

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HLF : NYSE : Consumer Goods
$67.01 -0.08 | -0.12%
Today's Range: 66.39 - 67.32
Avg. Daily Volume: 2,151,100
07/28/16 - 3:59 PM ET

Financial Analysis


HERBALIFE LTD's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. HERBALIFE LTD has weak liquidity. Currently, the Quick Ratio is 0.72 which shows a lack of 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 121.54% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)1119.61105.4
EBITDA ($mil)207.4200.2
EBIT ($mil)183.5177.3
Net Income ($mil)95.878.2


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)774.2715.5
Total Assets ($mil)2386.32388.9
Total Debt ($mil)1402.81812.8
Equity ($mil)64.9-301.2


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin55.2453.49
EBITDA Margin18.5218.11
Operating Margin16.3916.04
Sales Turnover1.882.01
Return on Assets14.9413.07
Return on Equity549.610.0
Debt Q1 FY16 Q1 FY15
Current Ratio1.221.22
Debt/Capital0.961.2
Interest Expense26.023.4
Interest Coverage7.067.58


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)92.892.5
Div / share0.00.0
EPS1.120.92
Book value / share0.7-3.26
Institutional Own % n/a n/a
Avg Daily Volume2091233.01894628.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 27.33 for the Personal Products industry and a discount compared to the S&P 500 average of 25.05. For additional comparison, its price-to-book ratio of 92.15 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 20.17. 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 15.49 Peers 27.33   HLF 9.82 Peers 16.16

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.

 

Discount. 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 significant discount 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 11.99 Peers 21.40   HLF 0.73 Peers 1.94

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 92.15 Peers 20.17   HLF 16.52 Peers -19.06

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 1.33 Peers 2.25   HLF -6.63 Peers 1.24

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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