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Herbalife Ltd (HLF)
NYSE:HLF
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Herbalife
(NYSE:HLF)
Select Model
Select Model
Rating:63Neutral
Price Target:
$17.50
▲(1.63% Upside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by mixed fundamentals: strong and consistent cash generation is offset by deteriorating operating profitability and a structurally weak balance sheet (negative equity). Technicals are moderately supportive with price above key long-term averages, and valuation looks inexpensive on a low P/E. The latest earnings call was broadly positive (return to growth, margin/cash-flow improvement, leverage reduction), but near-term risks remain from China weakness, FX and investment-related margin pressure.
Positive Factors
Consistent Cash Generation
Herbalife’s multi-year positive operating and free cash flow provides durable internal funding for capex, SaaS rollout and debt paydown. Persistent cash generation supports reinvestment, cushions earnings volatility, and underpins long-term strategic programs even amid margin swings.
Meaningful Debt Reduction and Lower Leverage
Sustained debt reduction materially improves financial flexibility and reduces interest burden, enabling targeted investments (SaaS, product launches) without over-relying on external financing. Lower leverage also reduces solvency risk while balance-sheet repair continues.
Digital Platform & Product Innovation (Pro2col)
Pro2col and new product launches create structural differentiation by personalizing nutrition and deepening distributor-consumer engagement. A tech-enabled platform can drive higher lifetime value, recurring sales and stronger distributor productivity over multiple years.
Negative Factors
Structurally Weak Balance Sheet (Negative Equity)
Persistent negative shareholders’ equity constrains capital flexibility and increases refinancing risk despite recent debt paydowns. Negative equity can limit strategic options, raise borrowing costs, and leave the company vulnerable to shocks or covenant pressures over the medium term.
Deteriorating Operating Profitability
An operating loss signals structural cost or mix pressure that erodes the converting of high gross margins into operating profits. If sustained, weaker operating leverage limits free cash flow upside and raises reliance on one-time actions or asset sales to restore profitability.
Regional/FX and Tax Headwinds (China, GST)
Geographic concentration challenges and FX/tax changes create recurring margin volatility and uncertainty in key markets. China softness and GST transition costs can suppress growth and margins for multiple quarters, complicating sustainable margin expansion and planning.
Herbalife (HLF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.83B
Dividend YieldN/A
Average Volume (3M)1.68M
Price to Earnings (P/E)5.8
Beta (1Y)0.30
Revenue Growth-0.78%
EPS Growth265.56%
CountryUS
Employees8,600
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.45
Shares Outstanding103,365,560
10 Day Avg. Volume2,487,986
30 Day Avg. Volume1,678,259
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)-2.57
Price to Sales (P/S)0.26
P/FCF Ratio5.24
Enterprise Value/Market Cap2.00
Enterprise Value/Revenue0.73
Enterprise Value/Gross Profit0.95
Enterprise Value/Ebitda6.25
Forecast
1Y Price Target
$17.00Price Target Upside-1.28% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)2.62
Revenue Forecast (FY)$5.15B
Herbalife Business Overview & Revenue Model
Company DescriptionHerbalife Nutrition Ltd. offers nutrition solutions in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and rest of Asia Pacific. The company provides products in the areas of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. It offers weight management products, including meal replacement products, protein shakes, drink mixes, weight loss enhancers, and healthy snacks; targeted nutrition products, which comprise functional beverages, and dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products, such as facial skin, body, and hair care products; and energy, sports, and fitness products, including N-R-G tea and energy drink products. The company also provides literature, promotional, and other materials that comprise start-up kits, sales tools, and educational materials. It offers its products through independent service providers and sales representatives, as well as through company-operated retail platforms. The company was formerly known as Herbalife Ltd. and changed its name to Herbalife Nutrition Ltd. in April 2018. Herbalife Nutrition Ltd. was founded in 1980 and is headquartered in Los Angeles, California.
How the Company Makes MoneyHerbalife generates revenue primarily through the sale of its nutrition products to independent distributors, who then sell these products directly to consumers. This multi-level marketing model allows distributors to earn commissions based on their sales and the sales of their recruited team members. Key revenue streams include product sales, membership fees for distributors, and incentives for achieving sales milestones. Additionally, Herbalife benefits from partnerships with various fitness and health organizations, enhancing its brand visibility and credibility. Factors contributing to its earnings include a strong global presence, a loyal customer base, and ongoing product innovation aimed at meeting consumer demands in the health and wellness sector.
Herbalife Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call struck a constructive tone: Herbalife showed a clear return to growth with Q4 net sales up 6.3% and full-year adjusted EBITDA/margin expansion, meaningful cash generation (Q4 operating cash flow +41% YoY; full year +17% YoY) and continued debt reduction (leverage reduced to 2.8x). Operational momentum in India, Latin America and product innovation (MultiBurn, HL/Skin, Life I/O Baseline) and the Pro2col digital initiative (including Cristiano Ronaldo partnership) provide upside. Offsetting items include regional weakness in China (volumes −11% YoY), margin pressure from FX, GST-related transition costs and bonus accrual timing, plus modest near-term guidance reflecting cautious assumptions and planned investments (SaaS, events). Overall the positives—growth resumption, margin/cashflow improvement, balance sheet repair and strategic digital/product initiatives—outweigh the challenges noted.Q4-2025 Updates
Positive Updates
Quarterly Net Sales Growth
Q4 net sales of $1.3B, up 6.3% year-over-year and +5.5% on a constant currency basis; second consecutive quarter of YoY net sales growth and strongest YoY increase since Q2 2021.
Full Year Revenue and FX-Adjusted Growth
Full year net sales just over $5.0B, up nearly 1% year-over-year and +2.5% excluding foreign exchange, demonstrating full-year top-line stability.
Adjusted EBITDA and Margin Expansion
Q4 adjusted EBITDA of $156M and adjusted EBITDA margin of 12.2%. Full year adjusted EBITDA of $658M with margin at 13.1%, marking the second consecutive year of adjusted EBITDA and margin expansion.
Strong Cash Generation and Debt Reduction
Operating cash flow of $98M in Q4 (up 41% YoY) and $333M for full year (up 17% YoY). Repayments of $283M of debt in 2025 and over $530M paid down in last two years; total leverage ratio reduced to 2.8x from 3.9x at end of 2023. Ended quarter with $353M cash (up ~$50M sequentially).
India Record Quarter
India delivered a record Q4 with net sales of ~$250M, up nearly 15% YoY (≈21% in local currency); volume growth in India approximately +18%, driven largely by a GST rate reduction that boosted demand.
Regional Momentum
Three of five regions grew YoY in Q4. Latin America: reported +18% YoY (+11% local); Mexico: reported +19% (+9% local). EMEA: reported +9% (+5% local). Asia Pacific: reported +5% (+9% local). North America nearly flat (sales down <1%, volumes down <2%).
Distributor Network Strength
North America new distributors +19% YoY in Q4; Latin America achieved 7th consecutive quarter of YoY growth; worldwide new distributors down 5% YoY in Q4 but up 16% on a 2-year stack with 4 of 5 regions showing increases—evidence of multiyear momentum.
Product Innovation and Portfolio Expansion
2025 product launches included MultiBurn (weight management), HL/Skin (K-beauty formulations with AI facial analysis) and Life I/O Baseline (healthy lifespan category). Management highlighted continued innovation and planned new launches in 2026.
Pro2col Digital Platform and Strategic Partnership
Acquired Pro2col technology (April 2025) and advanced beta to 2.0 in December; phased rollout expanding to U.S., Canada, Puerto Rico and select EMEA markets. U.S. beta distributors to have first access to personalized supplements by end of H1 2026. Cristiano Ronaldo acquired 10% of HBL Pro2col for $7.5M and committed services/sponsorship to elevate visibility and adoption.
Operational Discipline on CapEx
Q4 CapEx of $19M (at low end of guidance). Q1 2026 CapEx guidance $10M–$20M; full year 2026 CapEx guidance $50M–$80M plus capitalized SaaS implementation costs of $40M–$60M.
Negative Updates
China Volumes and Sales Weakness
China net sales down 4% YoY (−6% in local currency) in Q4; volume decline approximately 11% YoY—management expects China to be a 2027 recovery story, not 2026.
Margin Pressures from FX and Bonuses
Q4 adjusted EBITDA margin declined 20 basis points YoY, with ~100 basis points of FX headwinds and an approximately 90 basis point headwind from employee bonus accruals (timing effect versus 2024), partially offset by pricing.
Gross Margin Headwinds
Q4 gross profit margin was 77.5%, down 30 basis points YoY due to ~100 basis points of FX pressure, ~30 basis points unfavorable sales mix and ~30 basis points of input cost inflation; pricing and other benefits partially offset these impacts.
India GST Transition Charge and Input Credit Limitations
Company excluded an approximately $11M transition charge related to September 2025 India GST amendments and noted it no longer expects to fully utilize certain pre-change input GST credits; management also highlighted a ~$16M net cost shift between G&A and member comp that modestly reduces 2026 margins.
Conservative Near-Term Guidance and Modest Margin Expansion
2026 guidance implies reported net sales growth of 1%–6% (constant currency flat to +5%) and adjusted EBITDA $670M–$710M (constant currency $665M–$705M). Management's guidance includes only modest margin expansion (investor noted ~20–30 bps), with some drag from GST and planned investments.
Worldwide New Distributor Shortfall in Q4
New distributors joining worldwide were down 5% YoY in Q4 (though 2-year stack +16%), indicating near-term variability in recruitment momentum despite longer-term improvement.
Ongoing FX Volatility Impacting Results
Foreign exchange remained a material factor—management cited both +80 bps tailwind in Q4 net sales and approximately 100 bps FX headwind to adjusted EBITDA in the quarter, contributing to quarter-to-quarter variability and an approximate $0.07 FX headwind to adjusted diluted EPS.
Increased Investment Spend (SaaS/Events) Weighing on Near-Term Expense
Planned capitalized SaaS implementation costs of $40M–$60M for 2026 (incremental to CapEx) and increased event spending to support distributors are expected to raise near-term operating outlays, partially funded by reallocation within advertising/promotions.
Company Guidance
Herbalife guided Q1 2026 net sales growth of 3%–7% (0.5%–4.5% constant currency), noting an approximately $31M FX benefit and ~250 bps currency tailwind to the quarter; Q1 adjusted EBITDA is expected at $155M–$175M and Q1 CapEx $10M–$20M. For full-year 2026, reported net sales growth is guided to 1%–6% (flat to +5% constant currency) with ~100 bps FX tailwind, adjusted EBITDA $670M–$710M (or $665M–$705M C.C.), CapEx $50M–$80M, capitalized SaaS $40M–$60M (incremental), an adjusted tax rate of ~30%, tariffs expected immaterial, and a corporate objective to reduce gross debt to $1.4B by end-2028.Herbalife Financial Statement Overview
Summary
Cash generation is consistently positive (operating cash flow and free cash flow positive across years), but operating profitability has deteriorated and turned into an EBIT loss in 2025. The balance sheet remains a major constraint due to persistent negative equity, despite a notable debt reduction shown in 2025.Income Statement
Revenue has been roughly flat to modestly down over 2021–2024, with a sharp rebound shown in 2025 (annual report data). Profitability has weakened materially versus 2020–2022: net margin fell from ~7.7% (2021) / ~6.2% (2022) to ~2.8% (2023) and ~5.1% (2024), and 2025 shows a negative operating profit (EBIT) despite a still-healthy gross margin (~77–79%). Strengths are consistently strong gross profitability and generally positive net income; the key weakness is the volatility/erosion in operating profitability culminating in an operating loss in 2025.44
Neutral
Balance Sheet
The balance sheet is the primary concern: stockholders’ equity is negative in every year provided (ranging from about -$0.5B to -$1.4B), which meaningfully reduces financial flexibility. Total debt was very high in 2020–2024 (roughly $2.5B–$3.0B) relative to the asset base (~$2.7B–$3.1B), although 2025 shows a large step-down in debt to ~$0.18B. Despite that improvement, negative equity and negative return on equity across all years signal an elevated leverage/structure risk profile.28
Negative
Cash Flow
Cash generation is a relative bright spot. Operating cash flow is consistently positive ($285M–$629M) and free cash flow is also consistently positive ($163M–$517M), with a notable improvement in 2025 to ~$253M and strong free-cash-flow growth that year. Free cash flow has generally been a meaningful portion of net income (~0.56–0.82). The main weakness is volatility in free cash flow (several down years) and operating cash flow that is not consistently strong relative to reported earnings in the provided coverage figures.66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.04B | 4.99B | 5.06B | 5.20B | 5.80B |
| Gross Profit | 3.81B | 3.89B | 3.87B | 4.03B | 4.56B |
| EBITDA | 562.70M | 509.10M | 482.20M | 679.50M | 821.50M |
| Net Income | 228.30M | 254.30M | 142.20M | 321.30M | 447.20M |
Balance Sheet | |||||
| Total Assets | 2.79B | 2.73B | 2.81B | 2.73B | 2.82B |
| Cash, Cash Equivalents and Short-Term Investments | 353.10M | 415.30M | 575.20M | 508.00M | 601.50M |
| Total Debt | 2.34B | 2.47B | 2.77B | 2.92B | 3.01B |
| Total Liabilities | 3.30B | 3.53B | 3.87B | 4.00B | 4.21B |
| Stockholders Equity | -515.10M | -801.10M | -1.06B | -1.27B | -1.39B |
Cash Flow | |||||
| Free Cash Flow | 252.90M | 163.40M | 222.50M | 196.10M | 308.90M |
| Operating Cash Flow | 333.30M | 285.40M | 357.50M | 352.50M | 460.30M |
| Investing Cash Flow | -108.70M | -84.60M | -134.80M | -156.20M | -156.40M |
| Financing Cash Flow | -295.50M | -335.30M | -148.30M | -264.70M | -728.60M |
Herbalife Technical Analysis
Neutral
17.22
Price Trends
16.28
Positive
13.32
Positive
11.11
Positive
Market Momentum
0.68
Positive
46.95
Neutral
25.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLF, the sentiment is Neutral. The current price of 17.22 is below the 20-day moving average (MA) of 17.80, above the 50-day MA of 16.28, and above the 200-day MA of 11.11, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 46.95 is Neutral, neither overbought nor oversold. The STOCH value of 25.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HLF.
Herbalife Risk Analysis
Herbalife disclosed 34 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 1 New Risks
1.
Acquisitions can expose us to significant risks and additional costs. Q2, 2025
Herbalife Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $472.03M | 12.83 | 9.52% | ― | 6.62% | -7.85% | |
65 Neutral | $2.15B | 73.36 | 10.38% | ― | -2.23% | 57.16% | |
64 Neutral | $1.64B | 491.43 | 6.60% | 3.53% | 0.54% | -24.42% | |
63 Neutral | $1.83B | 5.80 | ― | ― | -0.78% | 265.56% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.51B | 19.23 | 5.17% | ― | 8.98% | -26.29% | |
56 Neutral | $353.37M | 33.56 | 3.20% | ― | 5.88% | -68.62% |
* Consumer Defensive Sector Average
HLF
Herbalife
17.22
8.40
95.24%
CENT
Central Garden Pet
38.43
1.50
4.06%
JJSF
J & J Snack Foods
86.13
-47.88
-35.73%
SMPL
Simply Good Foods
16.38
-19.34
-54.14%
NATR
Nature's Sunshine Products
27.10
12.58
86.64%
USNA
USANA Health
19.33
-13.16
-40.50%
Herbalife Corporate Events
Business Operations and StrategyFinancial Disclosures
Herbalife Gains Cristiano Ronaldo Backing for Pro2col Platform
Positive
Feb 18, 2026
Herbalife reported that for the fourth quarter of 2025, net sales rose 6.3% year over year to $1.3 billion, with net income of $85.4 million and adjusted EBITDA of $156.1 million, all above guidance. For full-year 2025, net sales edged up 0.9% to $5.0 billion despite foreign-exchange headwinds, while adjusted EBITDA climbed to $657.6 million and leverage was kept at 2.8 times, supported by strong cash generation.
Operationally, the company highlighted distributor momentum in North America and Latin America, as well as progress in its Pro2col personalized wellness platform, including the December 2025 release of Pro2col Beta 2.0 in the U.S., Canada, and Puerto Rico. In February 2026, Cristiano Ronaldo invested $7.5 million for a 10% stake in Pro2col Software and agreed to provide sponsorship rights, signaling strategic endorsement of Herbalife’s push into technology-driven, personalized nutrition and potentially enhancing the platform’s global visibility and appeal to consumers and distributors.
The most recent analyst rating on (HLF) stock is a Buy with a $19.00 price target. To see the full list of analyst forecasts on Herbalife stock, see the HLF Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.