Herbalife Ltd

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HLF : NYSE : Consumer Goods
$49.65 up 0.2 | 0.4%
Today's Range: 49.245 - 49.735
Avg. Daily Volume: 1332900.0
12/08/16 - 10:27 AM ET

Financial Analysis


HERBALIFE LTD's gross profit margin for the third 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 0.69 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 194.64% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)1122.01102.9
EBITDA ($mil)188.4191.1
EBIT ($mil)163.7166.5
Net Income ($mil)87.793.6


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)788.3813.2
Total Assets ($mil)2532.62421.5
Total Debt ($mil)1442.91653.4
Equity ($mil)123.7-130.7


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin55.0255.86
EBITDA Margin16.7917.32
Operating Margin14.5915.1
Sales Turnover1.791.86
Return on Assets9.6714.77
Return on Equity198.140.0
Debt Q3 FY16 Q3 FY15
Current Ratio1.231.45
Debt/Capital0.921.09
Interest Expense24.024.2
Interest Coverage6.826.88


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)93.192.6
Div / share0.00.0
EPS1.011.09
Book value / share1.33-1.41
Institutional Own % n/a n/a
Avg Daily Volume1307072.02231721.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 84.38 for the Personal Products industry and a discount compared to the S&P 500 average of 25.45. For additional comparison, its price-to-book ratio of 36.45 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 14.29. 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 17.11 Peers 84.38   HLF 11.70 Peers 33.49

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 8.85 Peers 21.38   HLF 0.79 Peers 1.66

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 36.45 Peers 14.29   HLF -32.46 Peers -1.19

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 0.99 Peers 1.74   HLF 0.83 Peers -0.26

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.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

HLF has a sales growth rate that significantly exceeds its peers.

 

 

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