Herbalife, Inc. - Momentum

Herbalife, Inc. (HLF) just hit a new multi-year high after reporting better than expected Q2 results in early August that included a 42% earnings surprise. Estimates have since jumped higher, with the current year up 13% on the news.

Second-Quarter Results

Revenue for the period was up 21% from last year to $689 million. Earnings also came in strong at $1.32, 42% ahead of the Zacks Consensus Estimate, boosting the company's average earnings surprise over the last four quarters to 23%.

The quarter marked the highest volume in the company's 30-year history, helping push revenue gains in the developed regions like the United States, Mexico and Korea into the double digits.

Paying Down Debt

Herbalife was also busy paying down debt during the quarter, with its debt balance falling $26 million to $73 million.

The company also repurchased $51 million of its common stock during the quarter.

Estimates

Estimates took a nice jump forward on the good quarter, with the current year adding 52 cents to $4.42. The next year added 47 cents to $4.84, a solid 9.5% growth projection.

Valuation

But in spite of the great results and optimistic view, HLF still has value, trading with a forward P/E multiple of 12.5X against its peers 15.5X.

2-Year Chart

HLF jumped to a new multi-year high at $56.51 on the good quarter. Look for support from the tend line and the breakout area on any weakness.

Read the June 21 HLF article here

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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
 
HERBALIFE LTD (HLF): Free Stock Analysis Report
 
HERBALIFE LTD (HLF): Free Stock Analysis Report
 
HERBALIFE LTD (HLF): Free Stock Analysis Report
 
HERBALIFE LTD (HLF): Free Stock Analysis Report
 
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