Herbalife Ltd. (HLF) recently jumped into a new all-time high after reporting strong Q2 results that included a 17% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock offers a healthy serving of momentum.
Company Description
Herbalife Ltd. is a network marketing company that specializes in selling weight management, nutritional and personal care products worldwide. The company was founded in 1980 and has a market cap of $6.9 billion.
We got an update on Herbalife’s business on August 1 with strong second-quarter results that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 27% from last year to $880 million. Earnings also came in strong at 88 cents, 17% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 16% over the last four quarters.
The good results were driven by a strong showing in Asia Pacific, where sales were up 38% from last year to $237 million. South and Central America however saw the biggest gain, with sales up 57% from last year to $130 million.
Financial Profile
The company has used its recent earnings momentum to strengthen its balance sheet, with cash and short-term investments up $84 million from last year to $254 million while total debt fell $81 million to $161 million.
Estimates
We saw some pretty solid movement in estimates off the good quarter, with the current year adding 18 cents to $3.09 while the next-year estimate gained 16 cents to $3.58, a bullish 16% growth projection.
But in spite of the gains, the valuation picture still looks solid with a PEG ratio only marginally higher than the traditional benchmark for value of 1.
12-Month Chart
On the chart, shares jumped into a new all-time high on the good quarter. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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