Herbalife Ltd (HLF, Financial), a prominent player in the consumer packaged goods industry, has recently witnessed a significant uptick in its stock performance. Over the past week, the company's stock price has increased by 2.76%, and over the last three months, it has surged by an impressive 33.53%. Currently, Herbalife's market capitalization stands at $1.11 billion, with a stock price of $11.15. According to GuruFocus's valuation, the stock is significantly undervalued with a current GF Value of $18.97, despite a previous GF Value of $21.45.
Overview of Herbalife Ltd
Herbalife Ltd is an international nutrition company that enhances the health and wellness of consumers across 95 markets through a direct-selling model. The company's diverse product portfolio includes weight management solutions, targeted nutrition, and energy, sports, and fitness products. Herbalife's primary revenue comes from North America, Mexico, South and Central America, EMEA, Asia-Pacific, and China, with weight management products being the major revenue driver.
Robust Profitability Metrics
Herbalife boasts a high Profitability Rank of 9/10, indicative of its strong market position. The company's operating margin is 7.05%, which is superior to 60.59% of its peers in the industry. Remarkably, Herbalife's Return on Equity (ROE) is reported at an exceptional rate, significantly higher than 99.95% of its competitors. Additionally, its Return on Assets (ROA) and Return on Invested Capital (ROIC) stand at 5.03% and 10.99% respectively, further underscoring its financial health and operational efficiency.
Consistent Growth Trajectory
Herbalife has maintained a solid Growth Rank of 8/10, reflecting its consistent revenue and profitability growth. Over the past five years, the company's revenue growth rate per share has been 11.10%, outperforming 71.87% of global competitors. Despite a slight decline in the 3-Year EPS without NRI Growth Rate, future estimates are highly optimistic, projecting an EPS growth rate of 24.50% over the next 3 to 5 years, which ranks better than 91.43% of companies in the sector.
Significant Shareholders
Notable investors in Herbalife include Jim Simons, holding 5,960,601 shares (5.96%), Seth Klarman (Trades, Portfolio) with 2,244,923 shares (2.25%), and HOTCHKIS & WILEY, which owns 2,139,110 shares (2.14%). These major stakeholders underscore the confidence in Herbalife's business model and future prospects.
Competitive Landscape
Herbalife operates in a competitive environment with key players like John B Sanfilippo & Son Inc (JBSS, Financial), Westrock Coffee Co (WEST, Financial), and Usana Health Sciences Inc (USNA, Financial), which have market caps of $1.11 billion, $907.851 million, and $856.133 million respectively. Despite the stiff competition, Herbalife's robust financial metrics and growth trajectory provide it with a competitive edge in the market.
Conclusion
In conclusion, Herbalife Ltd remains significantly undervalued according to the latest GF Value, despite its recent price surge. The company's strong profitability and promising growth prospects make it an attractive option for investors looking for sustainable returns in the consumer packaged goods sector. With its strategic market positioning and robust financial health, Herbalife is well-poised for continued success and growth.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
