Herbalife Ltd. (HLF) stock analysis

P/E above its 5-year median

Herbalife's P/E of 9.5 is above its own 5-year median of 6.3.

P/E below the industry

Herbalife's P/E of 9.5 is below the Wholesale Trade-non-durable Goods median of 22.6.

EV/EBITDA below its 5-year median

Herbalife's EV/EBITDA of 5.1 is below its 5-year median of 5.8.

P/S above the industry

Herbalife's price-to-sales of 0.32 is above the Wholesale Trade-non-durable Goods median of 0.30 (book value is negative, so we use sales).

Trading below fair value

The share price of $15.96 is below our fair value estimate of $29.95.

Margin of safety over 20%

The price is 46.7% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -1.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -12.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -44.0% over the last twelve months, against a 5-year average of -9.3% a year.

Growing faster than the industry

Revenue grew 6.4% over the last twelve months; the Wholesale Trade-non-durable Goods median is -5.1%.

Guidance raised

Herbalife raised its FY 2026 Depreciation and amortization, and amortization of SaaS implementation costs outlook on Nov 2, 2026.

Gross margin slipping

Gross margin was 77.6% over the last twelve months, against 78.0% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 33.3%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings shrank over 5 years

Net income shrank 9.3% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 3.4% over the last twelve months, against a 5-year average of 5.3%.

Net margin above the industry

Herbalife's net margin of 3.4% is above the Wholesale Trade-non-durable Goods median of -13.1%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 20.5% of total debt.

Interest not well covered

Operating income covers interest expense 2.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.19 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.56; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Herbalife has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.