Herbalife (HLF) AI Stock Analysis

• Market Cap: $705.80M
• Dividend Yield: N/A
• Average Volume (3M): 2.25M
• Price to Earnings (P/E): 2.5
• Beta (1Y): 0.37
• Revenue Growth: -2.45%
• EPS Growth: 100.59%
• Country: US
• Employees: 8,600
• Sector: Healthcare
• Sector Strength: 41
• Industry: Packaged Foods
• EPS (TTM): 0.59
• Shares Outstanding: 101,846,730
• 10 Day Avg. Volume: 2,001,151
• 30 Day Avg. Volume: 2,250,886
• PEG Ratio: 0.26
• Price to Book (P/B): -1.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $10.00
• Price Target Upside: 44.30% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Herbalife's stock shows a mixed outlook. Strong operational efficiency is offset by financial risks, notably high leverage and declining sales. The stock's low P/E ratio suggests undervaluation, which could attract investors despite technical indicators showing little momentum. Strategic initiatives and EBITDA improvements are positive, but regional sales declines and market challenges are concerns.

Positive Factors

Acquisitions

HLF announced acquisitions of Pro2col Health, LinkBiosciences, and Pruvit Venture, expected to improve customer engagement and distributor productivity.

Leadership

New CEO Stephan Gratziani has a long-term vision and connects with top distributors, contributing positively to the company's future.

New Distributor Growth

The growth of new worldwide distributors accelerated, marking the third consecutive quarterly increase.

Negative Factors

App Usage

In Mexico, the trend of average active users of the Herbalife Shop app has softened sequentially and is now trending negative year over year.

Regional Performance

New distributor growth for HLF was +16% in 1Q25, but with the trend in N. America inflecting negative (-1%) and China continued to decline (-23%).

Web Traffic

Globally, the trends across web & app traffic have been consistently weak with a notable worsening in average unique visitors to myherbalife.com.

Herbalife Business Overview & Revenue Model

Company Description

Herbalife 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 Money

Herbalife 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 shows mixed results. While the gross profit margin remains robust, declining revenue and net profit margins indicate challenges. The balance sheet reveals significant leverage concerns with negative equity, and while cash flow generation is stable, it is offset by high financing outflows.

Income Statement

Herbalife's income statement shows a declining trend in total revenue over the past few years, with a recent TTM total revenue of $4.95 billion, down from $5.20 billion in 2022. The gross profit margin remains strong at approximately 77.39% for the TTM period, indicating efficient cost management. However, the net profit margin has decreased to 5.66% from higher levels in previous years, highlighting challenges in maintaining profitability. The EBIT margin for TTM stands at 9.08%, and EBITDA margin at 10.64%, both reflecting a stable yet pressured operating environment.

Balance Sheet

The balance sheet reveals significant financial leverage, with a negative stockholders' equity of -$736 million as of TTM, indicating high debt levels relative to assets. The debt-to-equity ratio is not calculable due to negative equity, raising concerns about financial stability. The equity ratio is also negative, further emphasizing the risk associated with high indebtedness. Despite these challenges, total assets remain substantial at $2.68 billion.

Cash Flow

Herbalife's cash flow statement shows a modest free cash flow growth, with TTM free cash flow of $164.4 million, slightly higher than the previous year's $163.4 million. The operating cash flow to net income ratio is 0.97, indicating efficient cash conversion from net income. However, the high levels of financing cash outflows raise concerns about reliance on debt to fund operations.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.95B	4.99B	5.06B	5.20B	5.80B	5.54B
	Gross Profit
3.83B	3.89B	3.87B	4.03B	4.56B	4.39B
	EBIT
449.60M	385.90M	356.40M	545.20M	734.10M	640.60M
	EBITDA
560.40M	509.10M	482.20M	672.70M	854.60M	740.90M
	Net Income Common Stockholders
280.40M	254.30M	142.20M	321.30M	447.20M	372.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
329.40M	415.30M	575.20M	508.00M	601.50M	1.05B
	Total Assets
2.68B	2.73B	2.81B	2.73B	2.82B	3.08B
	Total Debt
2.40B	2.47B	2.77B	2.88B	2.96B	2.64B
	Net Debt
2.07B	2.05B	2.19B	2.38B	2.36B	1.59B
	Total Liabilities
3.42B	3.53B	3.87B	4.00B	4.21B	3.93B
	Stockholders Equity
-736.00M	-801.10M	-1.06B	-1.27B	-1.39B	-856.10M
Cash Flow		Free Cash Flow
164.40M	163.40M	222.50M	196.10M	308.90M	516.60M
	Operating Cash Flow
271.80M	285.40M	357.50M	352.50M	460.30M	628.60M
	Investing Cash Flow
-70.60M	-84.60M	-134.80M	-156.20M	-156.40M	-123.20M
	Financing Cash Flow
-249.30M	-335.30M	-148.30M	-264.70M	-728.60M	-320.90M

Herbalife Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.93
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLF, the sentiment is Negative. The current price of 6.93 is above the 20-day moving average (MA) of 6.92, below the 50-day MA of 7.49, and below the 200-day MA of 7.42, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 48.18 is Neutral, neither overbought nor oversold. The STOCH value of 56.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLF.

Herbalife Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDNA	77 Outperform	$985.55M	15.36	21.57%	―	25.92%	―
USNA	73 Outperform	$560.00M	16.47	6.78%	―	-2.69%	-43.24%
AORT	68 Neutral	$1.27B	―	-7.25%	―	5.94%	-115.82%
HSTM	64 Neutral	$889.20M	45.59	5.40%	0.40%	3.36%	7.51%
HLF	62 Neutral	$705.80M	2.52	-31.74%	―	-2.45%	100.59%
AVDL	59 Neutral	$904.51M	―	-34.65%	―	252.64%	85.10%
Sector *	52 Neutral	$5.19B	3.04	-44.64%	2.82%	16.45%	-0.53%

Herbalife Corporate Events

Herbalife Reports Q1 2025 Financial Results

Herbalife reported its financial results for the first quarter of 2025, with net sales reaching $1.2 billion, down 3.4% from the previous year, but showing a 1.4% increase on a constant currency basis. The company exceeded its guidance for adjusted EBITDA and improved its gross profit margin. Recent strategic acquisitions, including Pro2col Health LLC and Pruvit Ventures, are expected to enhance Herbalife’s product offerings and market reach. The company also revised its full-year guidance, narrowing its net sales range and raising its adjusted EBITDA expectations.

Spark’s Take on HLF Stock

According to Spark, TipRanks’ AI Analyst, HLF is a Neutral.

Herbalife’s overall stock score is 47, reflecting significant financial challenges with declining revenues and high leverage. While there are positive developments in leadership and earnings guidance, technical indicators and regional sales declines suggest caution. The stock appears undervalued, offering potential upside if strategic initiatives succeed, but risks remain substantial.

To see Spark’s full report on HLF stock, click here.