Herbalife (HLF, Financial) has announced its first-quarter revenue at $1.221 billion, slightly missing the consensus estimate of $1.23 billion. Despite this, the company's performance was robust, leading to an upward revision of the full-year 2025 Adjusted EBITDA expectations. Stephan Gratziani, the President and incoming CEO, highlighted that recent acquisitions have bolstered Herbalife's market position, aligning with their strategy for transformative growth.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Herbalife Ltd (HLF, Financial) is $9.33 with a high estimate of $13.00 and a low estimate of $7.00. The average target implies an upside of 29.63% from the current price of $7.20. More detailed estimate data can be found on the Herbalife Ltd (HLF) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Herbalife Ltd's (HLF, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Herbalife Ltd (HLF, Financial) in one year is $13.25, suggesting a upside of 84.03% from the current price of $7.2. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Herbalife Ltd (HLF) Summary page.
HLF Key Business Developments
Release Date: February 19, 2025
- Net Sales: $1.2 billion for Q4 2024, down 0.6% year-over-year; $5 billion for full year 2024, down 1.4% year-over-year on a reported basis.
- Constant Currency Net Sales Growth: Up 2.7% for Q4 2024; up 1.2% for full year 2024.
- Adjusted EBITDA: $150 million for Q4 2024, exceeding guidance; $635 million for full year 2024, up from $571 million in 2023.
- Adjusted EBITDA Margin: 12.4% for Q4 2024, up 340 basis points year-over-year; 12.7% for full year 2024, up 140 basis points from 2023.
- Gross Profit Margin: 77.8% for Q4 2024, up 150 basis points year-over-year.
- Net Income: $178 million for Q4 2024, including $147 million of non-cash net deferred income tax benefits.
- Adjusted Diluted EPS: $0.36 for Q4 2024, includes a $0.07 FX headwind.
- Operating Cash Flows: $70 million for Q4 2024, down $27 million from Q4 2023.
- Total Leverage Ratio: Reduced to 3.2 times as of December 31, 2024, from 3.9 times at the end of 2023.
- Debt Reduction: $250 million paid down in 2024.
- Regional Performance: Latin America, EMEA, and Asia Pacific reported net sales growth in Q4 2024; China net sales decreased 20% year-over-year.
- Distributor Growth: New distributor growth up 22% year-over-year in Q4 2024; sales leader retention increased from 68.3% to 70.3%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Herbalife Ltd (HLF, Financial) reported net sales growth on a constant currency basis for both the fourth quarter and the full year 2024.
- The company delivered strong adjusted EBITDA results, significantly exceeding guidance and prior year figures.
- Herbalife Ltd (HLF) successfully paid down $250 million in debt, reducing its total leverage ratio from 3.9 times to 3.2 times.
- The company experienced a 22% year-over-year increase in new distributor growth in Q4, marking the third consecutive quarter of growth.
- Herbalife Ltd (HLF) is implementing a robust transformative digital strategy to enhance distributor engagement and business operations.
Negative Points
- Net sales for the fourth quarter were slightly below the fourth quarter of 2023 on a reported basis due to unfavorable foreign exchange rates.
- North American net sales were down 3% year-over-year, with continued challenges in volume trends.
- China's net sales decreased by 20% year-over-year, driven by volume declines and strategic shifts in business focus.
- The company faces a significant currency headwind in 2025, with an expected $200 million negative impact on net sales and $70 million on adjusted EBITDA.
- Herbalife Ltd (HLF) anticipates potential exposure to retaliatory tariffs from Mexico, which could impact financial results later in the year.
