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Herbalife Ltd (HLF)
:HLF
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Herbalife
(NYSE:HLF)66Neutral
Positive Factors
Distributor Growth
Q4 marked the third consecutive quarter of year-over-year growth in new distributors, showing momentum in distributor recruitment.
Leadership Change
The elevation of President Stephan Gratziani to CEO is viewed favorably due to his extensive experience and involvement in modernization initiatives.
Negative Factors
Foreign Exchange and Tariffs
Uncertainties remain involving foreign exchange impacts and potential tariffs, affecting the company's outlook.
Herbalife (HLF) vs. S&P 500 (SPY)
Market Cap
$822.73M
Dividend YieldN/A
Average Volume (3M)3.32M
Price to Earnings (P/E)3.5
Beta (1Y)0.59
Revenue Growth-1.37%
EPS Growth75.47%
CountryUS
Employees8,600
SectorHealthcare
Sector Strength74
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)2.50
Shares Outstanding101,197,040
10 Day Avg. Volume5,307,681
30 Day Avg. Volume3,323,714
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)0.16
Price to Cash Flow (P/CF)3.00
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.17Price Target Upside-17.01% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
Herbalife Business Overview & Revenue Model
Company DescriptionHerbalife Nutrition Ltd. is a global nutrition company that develops and sells dietary supplements, weight management, sports nutrition, and personal-care products. Founded in 1980 and headquartered in Los Angeles, California, Herbalife operates in over 90 countries through a network of independent distributors. The company is dedicated to improving nutritional habits around the world with high-quality products backed by science and a commitment to personal wellness.
How the Company Makes MoneyHerbalife makes money primarily through a multi-level marketing (MLM) model, where independent distributors sell products directly to consumers. Distributors earn revenue through both retail sales and recruiting new distributors, who in turn sell products and expand the network. The company generates income from the sales of its diverse product line, including weight management, targeted nutrition, energy and fitness, and outer nutrition products. Herbalife also benefits from economies of scale and a global presence, which allows the company to leverage its extensive supply chain and distribution network. Key revenue streams include product sales to distributors and, indirectly, the recruitment and training of new distributors, which expand its customer base and market penetration.
Herbalife Financial Statement Overview
Summary
Herbalife's financial performance is challenged by declining revenues and profitability, high leverage with negative equity, and fluctuating cash flows. While operating cash flows remain positive, the overall financial health poses significant risks.Income Statement
Herbalife's income statement reveals a challenging financial period. The gross profit margin has remained relatively stable, but there is a concerning decline in revenue over the years, with a significant drop in EBIT and EBITDA in 2024, indicating operational inefficiencies. The net profit margin has shown variability, with the latest year showing a decrease, highlighting profitability challenges.45
Neutral
Balance Sheet
The balance sheet shows a negative stockholders' equity over the years, indicating financial instability. The debt-to-equity ratio is not applicable due to negative equity, but the overall high liabilities relative to assets suggest a leveraged position. The return on equity calculation is also not applicable due to negative equity, and this is a notable risk factor.30
Negative
Cash Flow
Cash flow analysis shows some strength in operating cash flows, which have been positive. However, the free cash flow has shown fluctuations, with a notable decrease in 2024. The free cash flow to net income ratio is inconsistent, highlighting potential cash flow management issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.99B | 5.06B | 5.20B | 5.80B | 5.54B | Gross Profit |
| 3.89B | 3.87B | 4.03B | 4.56B | 4.39B | EBIT |
| 385.90M | 356.40M | 545.20M | 734.10M | 640.60M | EBITDA |
| 509.10M | 482.20M | 672.70M | 854.60M | 740.90M | Net Income Common Stockholders |
| 254.30M | 142.20M | 321.30M | 447.20M | 372.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 415.30M | 575.20M | 508.00M | 601.50M | 1.05B | Total Assets |
| 2.73B | 2.81B | 2.73B | 2.82B | 3.08B | Total Debt |
| 453.00M | 2.77B | 2.88B | 2.96B | 2.64B | Net Debt |
| 37.70M | 2.19B | 2.38B | 2.36B | 1.59B | Total Liabilities |
| 3.53B | 3.87B | 4.00B | 4.21B | 3.93B | Stockholders Equity |
| -801.10M | -1.06B | -1.27B | -1.39B | -856.10M |
| Cash Flow | Free Cash Flow | |||
| 163.40M | 222.50M | 196.10M | 308.90M | 516.60M | Operating Cash Flow |
| 285.40M | 357.50M | 352.50M | 460.30M | 628.60M | Investing Cash Flow |
| -84.60M | -134.80M | -156.20M | -156.40M | -123.20M | Financing Cash Flow |
| -335.30M | -148.30M | -264.70M | -728.60M | -320.90M |
Herbalife Technical Analysis
Positive
8.64
Price Trends
6.56
Positive
7.09
Positive
8.35
Positive
Market Momentum
0.64
Negative
69.99
Neutral
73.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLF, the sentiment is Positive. The current price of 8.64 is above the 20-day moving average (MA) of 6.87, above the 50-day MA of 6.56, and above the 200-day MA of 8.35, indicating a bullish trend. The MACD of 0.64 indicates Negative momentum. The RSI at 69.99 is Neutral, neither overbought nor oversold. The STOCH value of 73.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLF.
Herbalife Risk Analysis
Herbalife disclosed 33 risk factors in its most recent earnings report. Herbalife reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Herbalife Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $265.12M | 16.11 | 11.19% | ― | 1.36% | 114.50% | |
73 Outperform | $564.16M | 14.09 | 8.17% | ― | -7.10% | -8.45% | |
66 Neutral | $822.73M | 3.46 | -31.74% | ― | -1.37% | 75.47% | |
63 Neutral | $380.88M | ― | -19.90% | 3.13% | -12.04% | -1796.38% | |
55 Neutral | $155.65M | 74.47 | 1.02% | ― | -43.80% | -97.89% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
HLF
Herbalife
8.64
0.02
0.23%
MED
Medifast
14.09
-24.00
-63.01%
NATR
Nature's Sunshine Products
14.23
-3.68
-20.55%
NUS
Nu Skin
8.16
-4.30
-34.51%
USNA
USANA Health
30.87
-17.69
-36.43%
Herbalife Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: 53.74% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with strong leadership transitions, debt reduction, and improvements in distributor growth and adjusted EBITDA. However, there are challenges in the China market and North America, along with currency-related financial impacts.Highlights
Leadership Transition
Stephan Gratziani announced as the new CEO and Rob Levy as President of Worldwide Markets. The leadership transition is seen as pivotal for the company's future growth.
Debt Reduction
Herbalife paid down $250 million in debt in 2024, reducing the total leverage ratio to 3.2 times from 3.9 times at the end of the previous year.
Adjusted EBITDA Performance
Adjusted EBITDA for the fourth quarter was $150 million, exceeding the guidance range, and for the full year, it was $635 million, significantly higher than last year's $571 million.
Distributor Growth
New distributor growth was up 22% year-over-year in Q4, marking the third consecutive quarter of growth.
Positive Net Sales Growth
Net sales on a constant currency basis grew 2.7% in Q4 and 1.2% for the full year, indicating strong sales performance.
Lowlights
Decline in China Market
China's net sales decreased 20% year-over-year, driven by volume declines and strategic shifts in the market.
North America Sales Decline
Net sales in North America were down 3% year-over-year, continuing a trend of declining sales in the region.
Impact of Currency Movements
Currency movements posed a significant headwind, with an approximately $70 million negative impact on adjusted EBITDA for 2025.
Company Guidance
During the Herbalife Fourth Quarter and Full Year 2024 Earnings Conference Call, several key metrics and guidance for 2025 were discussed. Herbalife reported net sales of $1.2 billion for Q4, slightly down from the previous year, but up 2.7% on a constant currency basis. The company achieved an adjusted EBITDA of $150 million, exceeding guidance and marking a significant improvement over the prior year. Herbalife reduced its debt by $250 million in 2024, lowering the total leverage ratio from 3.9 to 3.2 times. For 2025, the company anticipates net sales growth of 1% to 7% on a constant currency basis, with a projected adjusted EBITDA between $600 million to $640 million, despite a $70 million expected negative impact from currency fluctuations. The guidance reflects continued focus on sustainable growth, debt reduction, and enhancement of distributor metrics, with further strategic initiatives planned to bolster the company's position in the global health and wellness market.Herbalife Corporate Events
Executive/Board ChangesFinancial Disclosures
Herbalife Announces New CEO and Leadership Changes
Positive
Feb 19, 2025
Herbalife has announced significant leadership changes, effective May 1, 2025, with Stephan Paulo Gratziani taking over as CEO, succeeding Michael O. Johnson who will become Executive Chairman. Despite minor declines in net sales due to currency headwinds, Herbalife reported strong financial performance in the fourth quarter of 2024, with improved adjusted EBITDA and a notable increase in distributor engagement, setting a positive outlook for 2025.
Executive/Board ChangesBusiness Operations and Strategy
Herbalife Secures CEO Leadership with New Agreement
Positive
Feb 12, 2025
On February 6, 2025, Herbalife Ltd. announced a new employment agreement with Michael O. Johnson, ensuring his role as CEO through the end of 2025. The agreement includes a base salary, annual bonus, and equity incentives, with specific conditions for vesting and accelerated awards based on employment status and company performance. This move solidifies leadership continuity and aligns executive incentives with company goals, potentially impacting Herbalife’s strategic direction and market confidence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.