Herbalife Ltd

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HLF : NYSE : Consumer Goods
$73.41 up 1.6 | 2.2%
Today's Range: 71.82 - 73.61
Avg. Daily Volume: 1131100.0
05/22/17 - 3:59 PM ET

Financial Analysis


HERBALIFE LTD's gross profit margin for the fourth quarter of its fiscal year 2016 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 average liquidity. Currently, the Quick Ratio is 1.16 which shows that technically this company has 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 466.91% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)1045.01098.4
EBITDA ($mil)158.4171.4
EBIT ($mil)132.7146.0
Net Income ($mil)99.484.5


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)844.0889.8
Total Assets ($mil)2565.42477.9
Total Debt ($mil)1447.91622.0
Equity ($mil)196.3-53.5


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin54.6355.95
EBITDA Margin15.1515.6
Operating Margin12.713.29
Sales Turnover1.751.8
Return on Assets10.1313.68
Return on Equity132.450.0
Debt Q4 FY16 Q4 FY15
Current Ratio1.851.53
Debt/Capital0.881.03
Interest Expense24.722.5
Interest Coverage5.376.49


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)93.192.7
Div / share0.00.0
EPS1.150.98
Book value / share2.11-0.58
Institutional Own % n/a n/a
Avg Daily Volume1130290.01175943.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 43.00 for the Personal Products industry and a value on par with the S&P 500 average of 25.02. For additional comparison, its price-to-book ratio of 33.59 indicates a significant premium versus the S&P 500 average of 3.00 and a significant premium versus the industry average of 8.49. 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 23.61 Peers 43.00   HLF 17.95 Peers 17.35

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 12.69 Peers 23.99   HLF 0.48 Peers 1.49

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 33.59 Peers 8.49   HLF -24.25 Peers -2.99

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 1.47 Peers 2.23   HLF 0.43 Peers 0.43

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.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

HLF is keeping pace with its peers on the basis of sales growth.

 

 

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