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Herbalife Ltd. provides health and wellness products in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and rest of Asia Pacific. The company provides products in the areas of weight management; targeted nutrition; energy, sports, and fitness; outer nutrition; and literature and promotion items. It offers weight management products, including meal replacement products, protein shakes, drink mixes, weight loss enhancers, and healthy snacks; targeted nutrition products, which comprise functional beverages, and dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products, such as facial skin, body, and hair care products; and energy, sports, and fitness products, including N-R-G tea and energy drink products. The company also provides literature, promotional, and other materials that comprise start-up kits, sales tools, and educational materials. It offers its products through sales representatives and independent service providers, as well as through company-operated retail platforms. The company was formerly known as Herbalife Nutrition Ltd. and changed its name to Herbalife Ltd. in April 2023. Herbalife Ltd. was founded in 1980 and is headquartered in Los Angeles, California.
Discounted Cash Flow Valuation of Herbalife Ltd.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $187.5M | $171.6M | $157.1M | $143.8M | $131.7M | $120.6M | $110.4M | $101M | $92.48M | $84.66M | $77.51M | $775.1M |
DCF | $149.3M | $118.8M | $94.58M | $75.29M | $59.93M | $47.71M | $37.98M | $30.23M | $24.07M | $19.16M | $191.6M | |
Value | $848.6M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 7.6% | 5.8% | 4.8% | 6.1% | 6.4% | 6.7% | 7.7% | 6.2% | 2.8% | 2.7% |
ROA | 24% | 18% | 21% | 24% | 21% | 21% | 26% | 20% | 13% | 14% |
ROE | -630% | 130% | -64% | -41% | -80% | -44% | -32% | -25% | -13% | -13% |
The average Net Margin over the past 5 years is +5.98%.
The trend of Net Margin over the past 5 years is -0.45%.
The average ROA over the past 5 years is +20.87%.
The trend of ROA over the past 5 years is -1.64%.
The average ROE over the past 5 years is -39.2%.
The trend of ROE over the past 5 years is +8.93%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 3.37 | 6.51 | 5.02 | 5.85 | 5.56 | 4.96 | 9.31 | 14.01 | 12.99 | 12.95 |
Debt Equity | -34.61 | 7.42 | -7.43 | -4.56 | -5.01 | -2.99 | -2.07 | -2.17 | -2.73 | -2.34 |
MIN | ||||||||||
Graham Stability | - | - | 71% | 100% | 100% | 100% | 100% | 85% | 37% | 37% |
The Debt/FCF trailing twelve month is 12.95.
The trend of Debt/FCF over the past 5 years is 1.87.
Graham’s Stability measure stands at 0.37.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | 1.7% | 0.69% | -3% | -2.7% | 0.19% |
Net Income | -8.3% | -14% | -27% | -56% | -3.7% |
Stockholders Equity | - | - | - | - | - |
FCF | -0.09% | -17% | -24% | 13% | -7% |
The Revenue CAGR over the past 5 years is +0.69%.
The trend of Revenue growth rate over the past 5 years is +0.19%.
The Earnings CAGR over the past 5 years is -13.67%.
The trend of Earnings growth rate over the past 5 years is -3.67%.
The Equity CAGR over the past 5 years is +7.95%.
The trend of Equity growth rate over the past 5 years is -.
The FCF CAGR over the past 5 years is -16.99%.
The trend of FCF growth rate over the past 5 years is -6.98%.