26 Sep

Does Herbalife Stock Have Room for More Growth?

WRITTEN BY Amit Singh

Stock performance

So far, Herbalife (HLF) shares have had a phenomenal run in 2018. Herbalife stock has risen 61.5% on a YTD (year-to-date) basis as of September 25. The stock has outperformed the broader markets. Notably, shares of other nutritional and dietary supplement makers have also experienced exceptional growth in 2018.

Usana Health Sciences (USNA) stock has risen 63.7% YTD, while Vitamin Shoppe (VSI) stock has nearly tripled. Nu Skin Enterprises (NUS) stock has risen 19.9% on a YTD basis. In comparison, the S&P 500 Index has risen 9.0%.

Does Herbalife Stock Have Room for More Growth?

Catalysts

Herbalife stock has benefited from the company’s strong financial performance in the first half of fiscal 2018. The company recorded strong growth in the United States and China—two of its key regions. Mexico returned to the growth trajectory, which is encouraging. The company’s accelerated pace of new product launches and expansion in new categories supported its volume point growth.

Meanwhile, Herbalife’s bottom line also had healthy growth due to stellar sales and a lower effective tax rate.

Outlook

The company’s management remains upbeat and expects the volume points to continue to improve across most of its geographies. The lower effective tax rate will likely support the bottom-line growth.

Analysts expect Herbalife’s top line to grow 10.5% in fiscal 2018. Meanwhile, the earnings are projected to grow 16.9%.

The company’s strong financial performance and upbeat outlook should impress investors. However, negative currency rates and higher manufacturing costs could have a negative impact on the performance.

Latest articles

At the end of the third quarter, Bristol-Myers Squibb, Celgene, Biogen, UnitedHealth, and Walmart (WMT) were Renaissance Technologies' top five buys.

Recently, Tesla (TSLA) unveiled its first made-in-China Model 3 sedan from its Shanghai Gigafactory. It's also now providing media test-drives.

For the second quarter of fiscal 2020, Cisco expects its revenues to fall 3–5% YoY. The company plans to remain conservative with its outlook.

Even as Disney+ launch pulled on NFLX stock, Netflix leadership believes the company will survive the attack on its market dominance.

Fake bitcoin investment ads put Facebook in trouble with Dutch billionaire and Big Brother reality show founder John de Mol.

On Wednesday, Barclays initiated coverage on Ralph Lauren (RL) stock with an “overweight” rating. Barclays put a target price of $130 on the stock.