Herbalife Ltd (HLF) continues to trade like a rock star, recently hitting a new all-time high after reporting another great quarter. With four consecutive earnings surprises and bullish growth projection, this Zacks #2 rank stock is a fast-track momentum player.
Company Description
Herbalife Ltd sells nutritional supplements, vitamins and other various healthcare products worldwide. The company was founded in 1980 and has a market cap of $6.3 billion.
Although HLF has been trading strong for the last few months, shares surged into a new all-time high in early May after the company reported a great quarter and raised its full-year guidance.
First-Quarter Results
Revenue for the period was up 28.5% from last year to $795 million. Earnings also came in strong at 71 cents, 16% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 22% over the last four quarters.
Herbalife’s strong international presence continues to pay off, led by large gains in Asia Pacific, where sales were up 41% from last year to $199 million. That makes Asia Pacific the company’s highest revenue region. South and Central America was close behind, with sales up 37% to $125 million.
Financial Profile
Herbalife has used its recent earnings momentum to strengthen its balance sheet, with cash and equivalents up $96 million from last year to $261 million while total debt fell $64 million to $183 million.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 16 cents to $2.89 while the next-year estimate gained 25 cents to $3.37, a bullish 17% growth projection.
Valuation
But in spite of the gains, HLF still looks reasonably valued, trading with a PEG ratio of 1.08, only a slight premium to the benchmark of 1 for value.
12-Month Chart
On the chart, HLF has been burning up the charts for the last few months, recently surging 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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