Can Herbalife Bounce Back In 2021?

Reasonable Valuation

In terms of forward non-GAAP price/earnings ratio, HLF’s 10.22x is 51% lower than the industry average20.88x. In terms of forward P/S ratio, the stock’s 0.93x is also lower than the industry average 1.62x. Also, its forward enterprise value/sales of 1.20x is 43.9% lower than the industry average 2.14x.

Favorable Analyst Estimates

Analysts expect HLF’s revenue to increase 13.9% for the quarter ended March 31, 2021, 15.9% for the quarter ending June 30, 2021, and 9% in fiscal 2021. Its EPS is expected to grow 31.3% for the quarter ended March 31, 2021, 24.8% in fiscal 2021, and 11.4% in fiscal 2022.

It has an average broker rating of 1.12. Also, all four Wall Street analysts that rated the stock have rated it a Strong Buy or Buy. HLF is expected to hit $69.67 in the near term, which indicates a potential upside of 47.8%.

POWR Ratings Reflect Rosy Prospects

HLF has an A overall rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. HLF has an A grade for Value, which is in sync with its lower-than-industry valuation ratios.

HLF  has an A grade for Quality also. This is in sync with its 48.7% trailing-12-month gross profit margin, which is higher than the industry average 35.4%. Its trailing-12-month return on total assets of 12.1% is also higher than the industry average 4.7%.

The stock has a B grade for Growth, which is consistent with analysts’ expectations that its revenue and EPS will increase significantly in the coming quarters.

HLF is ranked #4 of 12 stocks in the B-rated Medical – Consumer Goods industry. Click here to see the additional ratings for HLF (Stability, Sentiment, and Momentum).

If you’re looking for other top-rated stocks in the Medical – Consumer Goods industry, with an Overall POWR Rating of A or B, you can access them here.

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