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Category: Stock Market and Herbalife
Date: 11 May 2020 Stock Price: $40.30 We take a look at the 1st quarter earnings release of their 2020 fiscal year of Herbalife Nutrition a global nutrition company with quarterly sales of over $1.26 billion
This quarter we delivered record volume point results reflecting the essential role our products play in the lives of many, especially during these times.- John Agwunobi, Chairman and CEO of Herbalife Nutrition" |
About Herbalife Nutrition
Herbalife Nutrition is a global company that has been changing people's lives with great nutrition products and a proven business opportunity for its independent distributors since 1980. The Company offers high-quality, science-backed products, sold in over 90 countries by entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle. Through the Company’s global campaign to eradicate hunger, Herbalife Nutrition is also committed to bringing nutrition and education to communities around the world.
Overview of Herbalife 1st quarter 2020 earnings report
The data below refers to the most recent quarter unless specified otherwise:
- Revenues: $1.262 billion (up from $1.172 billion for the same quarter of the previous year)
- Revenue increased by 7.7% over the last 12 months
- Operating expenses: $245.7 million (up from $241.6 million for the same quarter of the previous year)
- Operating expenses increased by 1.7% over the last 12 months
- Some margin gain for Herbalife Nutrition with their revenues increasing at a rate faster than their operating expenses
- Net income: $45.6 million (down from $96.3 million for the same quarter of the previous year)
- Diluted earnings per share: $0.32 (down from $0.66 for the same quarter of the previous year)
- PE ratio of Herbalife Nutrition : 21.4
- Diluted weighted-average shares outstanding: 140.2 million (down from 145.5 million for the same quarter of the previous year)
- Cash and cash equivalents: $944.2 million
- Cash and cash equivalents per share: $6.73
- Cash and cash equivalents makes up 16.7% of Herbalife Nutrition market capital
- Cash and cash equivalents makes up 34.7% of Herbalife Nutrition total assets
- Cash generated from operations: $141.7 million
- Cash generated from operations per share $1.01
Herbalife Nutrition's management commentary on their 1st quarter 2020 earnings report
LOS ANGELES, May 7th, 2020 – Herbalife Nutrition Ltd. (NYSE: HLF) today reported financial results for the first quarter ended March 31, 2020:
- First quarter 2020 volume points of 1.6 billion increased 5.6% compared to the first quarter 2019, representing the largest quarterly volume point result in Company history.
- China volume points increased 29.4% compared to the prior year period, demonstrating a strong recovery from last year’s 100-day review.
- March worldwide volume points represented the largest single month in Company history.
- First quarter 2020 reported net sales of $1.3 billion increased 7.7% compared to the first quarter of 2019.
- First quarter 2020 reported diluted EPS of $0.32 and adjusted earnings of $0.83 per diluted share, compared to $0.66 per diluted share and $0.66 per adjusted diluted share, respectively, for the first quarter 2019, which were negatively impacted in 2020 by expenses of approximately $2.2 million, or $0.01 per diluted share, and in first quarter 2019 of $0.7 million, or $0.00 per diluted share, related to the China Growth and Impact Investment Program.
- Given the fluidity of COVID-19 and its impact on our ability to provide guidance, we are providing preliminary April volume point results, which we estimate declined 1% worldwide compared to April 2019.
Outlook
The extent and duration of business disruption and related financial impact from the COVID-19 pandemic cannot be reasonably estimated at this time but could materially impact our business, financial condition and consolidated results for the second quarter and full year 2020. The Company will periodically reassess its ability to provide guidance for full year 2020 as and when we believe the impact of the pandemic can be reasonably estimated.
The extent and duration of business disruption and related financial impact from the COVID-19 pandemic cannot be reasonably estimated at this time but could materially impact our business, financial condition and consolidated results for the second quarter and full year 2020. The Company will periodically reassess its ability to provide guidance for full year 2020 as and when we believe the impact of the pandemic can be reasonably estimated.
Herbalife Nutrition (NYSE: HLF) stock price history
The image below, obtained from Google, shows the stock price history of Herbalife (NYSE: HLF) over the last 5 years. And its been a pretty good time for Herbalife over the last 5 years. 5 years ago the stock of Herbalife was trading at around $25 a stock and its currently trading at $40.30. That's a decent return of 61.20% provided to Herbalife stockholders over the last 5 years.
Herbalife stock is trading at closer to its 52 week high of $48.82 and far away from its 52 week low of $20.73 which to us is a clear indication that the short term sentiment and momentum of Herbalife stock is positive at this point in time.
Herbalife stock is trading at closer to its 52 week high of $48.82 and far away from its 52 week low of $20.73 which to us is a clear indication that the short term sentiment and momentum of Herbalife stock is positive at this point in time.
Recent Google search trends for HLF stock price
The graphic below shows the Google search trends for HLF stock price over the last 12 months in the United States as obtained from Google Trends. As the graphic shows the searches for HLF stock price is very erratic and not very stable over time which to us suggests limited interest in the stock price of Herbalife.
Recent coverage of Herbalife Nutrition
The extract below shows recent coverage of Herbalife as obtained from TheStreet.com
Herbalife Nutrition Ltd. (NYSE:HLF) went up by 11.52% from its latest closing price when compared to the 1-year high value of $50.30 and move down -22%, while HLF stocks collected +18.21% of gains with the last five trading sessions. The Wall Street Journal reported on 05/08/20 that Herbalife to Pay $123 Million to Settle China Bribery Allegations
Herbalife Nutrition Ltd. (NYSE:HLF) Worth an Investment?Herbalife Nutrition Ltd. (NYSE: HLF) scored price to earnings ratio above its average ratio, recording 22.27 times of increase in earnings at the present.
HLF Market Performance
HLF stocks went up by 18.21% for the week, with the monthly jump of 34.96% and a quarterly performance of 0.88%, while its annual performance rate touched -14.94%. The simple moving average for the period of the last 20 days is 22.15% for HLF stocks with the simple moving average of 6.24% for the last 200 days.
Analysts’ Opinion on Herbalife Nutrition Ltd. (NYSE:HLF)
Many brokerage firms have already submitted their reports for HLF stocks, with Citigroup repeating the rating for HLF shares by setting it to “Buy”. The predicted price for HLF socks in the upcoming period according to Citigroup is $55 based on the research report published on December 4, 2019.
Read the full article here
Herbalife Nutrition Ltd. (NYSE:HLF) went up by 11.52% from its latest closing price when compared to the 1-year high value of $50.30 and move down -22%, while HLF stocks collected +18.21% of gains with the last five trading sessions. The Wall Street Journal reported on 05/08/20 that Herbalife to Pay $123 Million to Settle China Bribery Allegations
Herbalife Nutrition Ltd. (NYSE:HLF) Worth an Investment?Herbalife Nutrition Ltd. (NYSE: HLF) scored price to earnings ratio above its average ratio, recording 22.27 times of increase in earnings at the present.
HLF Market Performance
HLF stocks went up by 18.21% for the week, with the monthly jump of 34.96% and a quarterly performance of 0.88%, while its annual performance rate touched -14.94%. The simple moving average for the period of the last 20 days is 22.15% for HLF stocks with the simple moving average of 6.24% for the last 200 days.
Analysts’ Opinion on Herbalife Nutrition Ltd. (NYSE:HLF)
Many brokerage firms have already submitted their reports for HLF stocks, with Citigroup repeating the rating for HLF shares by setting it to “Buy”. The predicted price for HLF socks in the upcoming period according to Citigroup is $55 based on the research report published on December 4, 2019.
Read the full article here
Herbalife Nutrition (NYSE: HLF) latest stock valuation
So based on Herbalife Nutrition 1st quarter 2020 earnings report what do we value Herbalife stock at? Based on Herbalife's latest earnings reported our valuation model provides a target price (full value price) for Herbalife at $38.90 a stock
We therefore believe that the stock of Herbalife Nutrition stock is close to being fully valued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $38.90 A good entry price into Herbalife Nutrition stock would therefore be at $35 or below.
We expect the stock of Herbalife to trade in a narrow range around its current price in coming weeks and months.
We therefore believe that the stock of Herbalife Nutrition stock is close to being fully valued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $38.90 A good entry price into Herbalife Nutrition stock would therefore be at $35 or below.
We expect the stock of Herbalife to trade in a narrow range around its current price in coming weeks and months.
Next earnings release of Herbalife
It is expected that Herbalife will release their 2nd quarter 2020 earnings release in early August 2020