HLF  Herbalife Ltd.

Exchange

NYSE

Sector

Health Care

Industry

Other Pharmaceuticals

Market Cap.

6.73B

Vuru Grade

63.45/100

Current Price

$74.62
-0.89 (-1.18%)

Growth Price

$26.20
Overvalued by 64.89%

Stability Price

$46.83
Overvalued by 37.24%

Company Metrics

  • P/E 15.69
  • P/S 1.54
  • P/B 34.06
  • EPS 4.76
  • Cash ROIC 67.52%
  • Cash Ratio 1.07
  • Dividend 0 / 0%
  • Avg. Vol. 1.55M
  • Shares 90.19M
  • Market Cap. 6.73B

Company Description

Herbalife Ltd., a network marketing company, sells weight management, nutritional supplement, energy, sports and fitness, and personal care products worldwide. It offers science based products in four principal categories: weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. The company's weight management product portfolio includes meal replacement shakes, weig... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Sorting Sham From Scam, The Debate Over Shopify And Herbalife
Seeking Alpha - Oct 18, 2017
The short-thesis presentation on Shopify by Andrew Left has led investors to compare Shopify with Herbalife, which was prosecuted by the FTC.
Why Herbalife Ltd. Stock Popped More Than 10%
Motley Fool - Oct 6, 2017
Shares of Herbalife Ltd. (NYSE:HLF) were surging today after the company announced the results of a self-tender offer, or an offer to buy back its stock from investors.
Why Herbalife Ltd. (HLF) Stock Is Soaring Today - Investorplace.com
Steadfast Capital Management LP Takes Position in Herbalife LTD. (HLF) - The Ledger Gazette
BRIEF-Herbalife Ltd says "we could face additional risks resulting from ...
Reuters - Oct 2, 2017
BRIEF-Herbalife Ltd says "we could face additional risks resulting from changes in China's data privacy and cybersecurity requirements".
Herbalife's Events System Might Violate The FTC Consent Order
Seeking Alpha - Sep 26, 2017
Every month, Herbalife Ltd.'s (HLF) top distributors organize events called Success Training Seminars (STSs). Held in airport hotel ballrooms and convention centers across the US, STSs bring distributors together for what top recruiters claim is ...
Herbalife: A Downgrade By Any Other Name
Seeking Alpha - Oct 4, 2017
The FTC injunction is beginning to take a serious bite out of HLF's sales momentum. Despite claims to the contrary, Herbalife management do not appear to comprehend the gravity of their new FTC constraints. Results however do not lie. Herbalife could ...
Herbalife purchases ~6.7M shares in tender offer
Seeking Alpha - Oct 11, 2017
Herbalife (HLF N/A) announces final results from its self-tender offer to buy up to $600M of its common stock. It has accepted for purchase 6,732,300 shares at $68.
Herbalife (HLF) Announces Final Results of Self-Tender Offer - StreetInsider.com
Herbalife Ltd. Announces Third Quarter 2017 Earnings Release Date and Investor ...
Business Wire (press release) - Oct 2, 2017
LOS ANGELES--(BUSINESS WIRE)--Global nutrition company Herbalife Ltd. (NYSE:HLF) will release its third quarter 2017 financial results after the close of trading on the NYSE on Thursday, November 2, 2017.
Is It The Right Time To Buy Herbalife Ltd (HLF)? - Simply Wall St
Herbalife LTD. (HLF) Shares Bought by Fmr LLC - The Ledger Gazette
Juniper Networks Inc, Herbalife, XL Group Ltd and more - AFTER HOURS
Proactive Investors UK - Oct 12, 2017
Also, XL Group Ltd (NYSE:XL) shares climbed over 3% to US$40.50 after hours as the insurance giant told investors it expected to register about $1.48bn in catastrophe losses in the third quarter, the bulk of which come from recent hurricanes Harvey ...
Herbalife Ltd. (HLF) Moves Higher on Volume Spike for October 13 - Equities.com
Herbalife Ltd: Carl Icahn's Icahn Carl C Bought Stake - WeeklyHub
Analyzing Procter & Gamble Company (The) (PG) & Herbalife LTD. (HLF)
Dispatch Tribunal - 14 hours ago
Procter & Gamble Company (The) (NYSE: PG) and Herbalife LTD. (NYSE:HLF) are both mid-cap consumer staples companies, but which is the superior stock?
Herbalife LTD. (HLF) vs. Procter & Gamble Company (The) (PG) Head-To-Head ... - Week Herald
Stonehill Capital Management Has Cut Its Herbalife LTD Common (HLF) Stake as ...
BZ Weekly - 1 hour ago
Stonehill Capital Management Llc decreased its stake in Herbalife Ltd Common (HLF) by 24.32% based on its latest 2017Q2 regulatory filing with the SEC.
Investor Watch: Looking at the Numbers for Herbalife Ltd. (NYSE:HLF) - Stock Talker
Herbalife LTD. Sees Unusually High Options Volume (NYSE:HLF) - TrueBlueTribune
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for HLF to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate HLF's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$74.62 Current Price

$26.20 Growth Price (DCF)

Overvalued by 64.89%


Growth Rate Assumed by Market: 36.49%


Future Free Cash Flow Growth Rate: 10.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$46.83 Stability Price (EPV)

Overvalued by 37.24%


Discount Rate: 15.0%

$-9.37 Book Price

Overvalued by 112.56%


Varying Cash Return on Invested Capital over the past 5 years

HLF has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

HLF has created $67.52 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 446.26M 625.92M 337.70M 549.70M 223.90M
divided by
Invested Capital 653.52M 578.55M 854.70M 563.70M 929.90M
Cash ROIC 68.29% 108.19% 39.51% 97.52% 24.08%

Varying Return on Equity over the past 5 years

HLF has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

HLF has generated $68.31 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 477.19M 527.53M 308.70M 339.10M 260.00M
divided by
Stockholders' Equity 420.76M 551.45M -334.40M -53.50M 196.30M
Return on Equity 113.41% 95.66% - - 132.45%

Excellent Business Performance over the past 10 years

HLF has been able to maintain profitability in good times and bad. This could mean HLF has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

HLF has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 228.87M 184.39M 225.29M 312.28M 418.92M 446.26M 625.92M 337.70M 549.70M 223.90M

Weak Balance Sheet

HLF's financial position is not ideal. The key is to check whether HLF is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 187.41M 150.85M 150.80M 190.55M 258.78M 333.53M 972.97M 645.40M 889.80M 844.00M
Current Assets 487.10M 484.77M 513.50M 595.59M 768.82M 963.85M 1.64B 1.39B 1.57B 1.46B
Total Assets 1.07B 1.12B 1.15B 1.23B 1.45B 1.70B 2.47B 2.37B 2.48B 2.57B
Current Liabilities 375.62M 401.90M 429.97M 470.82M 548.69M 716.89M 922.18M 874.80M 1.02B 791.50M
Total Liabilities 885.00M 879.59M 786.74M 745.01M 886.02M 1.28B 1.92B 2.71B 2.53B 2.37B
Stockholder' Equity 182.24M 241.73M 359.31M 487.21M 560.19M 420.76M 551.45M -334.40M -53.50M 196.30M
Current Ratio 1.30 1.21 1.19 1.27 1.40 1.34 1.78 1.59 1.53 1.85
TL-to-TA 0.83 0.78 0.69 0.60 0.61 0.75 0.78 1.14 1.02 0.92

Consistent Reinvestment of Profits over the past 10 years

HLF has consistently retained profits. This may put HLF in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, HLF can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 25.19M 72.51M 159.71M 257.00M 305.93M 148.37M 247.28M -665.40M -326.30M -66.30M
Retained Earnings Growth - 187.84% 120.26% 60.92% 19.04% -51.50% 66.67% -369.09% 50.96% 79.68%

Competitive Industry over the past 10 years

HLF is likely operating in an industry with medium to low barriers to entry. This may mean that HLF doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that HLF invests heavily in R&D and Sales, General & Administrative expenses.

Only $9.19 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 191.45M 221.19M 203.35M 290.53M 412.58M 477.19M 527.53M 308.70M 339.10M 260.00M
divided by
Revenue 2.15B 2.36B 2.32B 2.73B 3.45B 4.07B 4.83B 4.96B 4.47B 4.49B
Net Profit Margin 8.92% 9.38% 8.75% 10.63% 11.94% 11.72% 10.93% 6.23% 7.59% 5.79%

Strong Pricing Power over the past 10 years

HLF has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$80.09 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 1.71B 1.90B 1.83B 2.18B 2.77B 3.26B 3.86B 3.98B 3.61B 3.63B
divided by
Revenue 2.15B 2.36B 2.32B 2.73B 3.45B 4.07B 4.83B 4.96B 4.47B 4.49B
Gross Margin 79.57% 80.57% 78.79% 79.56% 80.31% 80.05% 80.03% 80.18% 80.85% 80.96%

Medium Capital Intensity over the past 10 years

HLF has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

32.48% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 41.94M 88.60M 59.77M 68.13M 90.41M 121.52M 146.96M 173.70M 79.00M 143.40M
divided by
Net Income 191.45M 221.19M 203.35M 290.53M 412.58M 477.19M 527.53M 308.70M 339.10M 260.00M
Capital Expenditure Ratio 21.91% 40.06% 29.39% 23.45% 21.91% 25.47% 27.86% 56.27% 23.30% 55.15%

Inconsistent Dividend History over the past 10 years

HLF has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 41.54M 50.70M 48.72M 53.74M 85.49M 135.09M 123.06M 30.40M - -
divided by
Shares Outstanding 72.71M 65.77M 63.10M 62.26M 124.85M 117.86M 107.45M 90.80M 85.30M 86.10M
Dividend Paid Per Share 0.57 0.77 0.77 0.86 0.68 1.15 1.15 0.33 - -
Price at Year End 18.36 9.69 19.77 33.95 51.67 29.39 77.92 38.04 53.86 48.14
Dividend Yield 3.11% 7.96% 3.91% 2.54% 1.33% 3.90% 1.47% 0.88% - -

Strong History of Stock Buybacks over the past 10 years

HLF has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 72.71M 65.77M 63.10M 62.26M 124.85M 117.86M 107.45M 90.80M 85.30M 86.10M
Stock Bought Back - 10.56% 4.23% 1.35% -50.13% 5.93% 9.69% 18.33% 6.45% -0.93%
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