Herbalife Ltd

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HLF : NYSE : Consumer Goods
$61.99 up 0.49 | 0.80%
Today's Range: 61.16 - 62.35
Avg. Daily Volume: 2,189,800
09/30/16 - 4:02 PM ET

Financial Analysis


HERBALIFE LTD's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. HERBALIFE LTD has weak liquidity. Currently, the Quick Ratio is 0.71 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 118.07% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)1201.81162.3
EBITDA ($mil)187.7182.4
EBIT ($mil)163.7157.3
Net Income ($mil)-22.982.8


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)936.7749.6
Total Assets ($mil)2613.92415.1
Total Debt ($mil)1426.61683.0
Equity ($mil)35.5-196.4


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin54.3255.04
EBITDA Margin15.6115.69
Operating Margin13.6213.53
Sales Turnover1.731.93
Return on Assets9.611.4
Return on Equity707.040.0
Debt Q2 FY16 Q2 FY15
Current Ratio1.141.33
Debt/Capital0.981.13
Interest Expense24.624.8
Interest Coverage6.656.34


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)93.092.5
Div / share0.00.0
EPS-0.280.97
Book value / share0.38-2.12
Institutional Own % n/a n/a
Avg Daily Volume2265123.01304166.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 27.30 for the Personal Products industry and a discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 159.63 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 12.97. 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 20.94 Peers 27.30   HLF 8.88 Peers 18.92

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

HLF is trading at a 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 11.13 Peers 22.64   HLF 0.97 Peers 1.47

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 159.63 Peers 12.97   HLF -9.91 Peers -6.96

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.

 

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

However, HLF is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HLF 1.25 Peers 2.29   HLF -2.90 Peers 1.03

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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