Herbalife (NYSE:HLF) Shares Gap Up Following Earnings Beat

Key Points

• Herbalife shares jumped after the company reported third-quarter adjusted EPS of $0.64, beating the $0.62 consensus, while revenue reached approximately $1.35 billion and increased year over year.
• The company raised its fiscal 2026 revenue guidance to $5.3 billion and authorized a $250 million share-repurchase program, potentially covering up to 19.3% of outstanding shares.
• Despite improving sales and cash flow, investors face risks from a softer margin outlook and CEO leadership uncertainty; analyst sentiment remains mixed, with an overall “Moderate Buy” rating and a $17.67 consensus price target.

Herbalife Ltd (NYSE:HLF - Get Free Report)'s share price gapped up prior to trading on Tuesday following a better than expected earnings announcement. The stock had previously closed at $13.28, but opened at $14.21. Herbalife shares last traded at $14.6290, with a volume of 308,554 shares traded.

The company reported $0.64 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.62 by $0.02. The company had revenue of $1.35 billion for the quarter, compared to analyst estimates of $1.31 billion. Herbalife had a net margin of 3.16% and a negative return on equity of 43.90%. The business's revenue for the quarter was up 3.9% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.50 earnings per share.

Herbalife declared that its Board of Directors has authorized a share repurchase plan on Tuesday, September 8th that allows the company to repurchase $250 million in outstanding shares. This repurchase authorization allows the company to purchase up to 19.3% of its shares through open market purchases. Stock repurchase plans are generally an indication that the company's board believes its stock is undervalued.

More Herbalife News

Here are the key news stories impacting Herbalife this week:

• Positive Sentiment: Third-quarter net sales rose 6.0% year over year to approximately $1.35 billion, exceeding analysts’ expectations of $1.31 billion. The company also reported strong profitability and operating cash flow, marking a fifth consecutive quarter of expansion. Herbalife third-quarter results
• Positive Sentiment: Herbalife raised fiscal 2026 revenue guidance to $5.3 billion, above the $5.2 billion consensus estimate. The updated fourth-quarter revenue outlook of $1.3 billion is broadly in line with expectations, suggesting sales momentum is holding up. Herbalife earnings and guidance
• Neutral Sentiment: Third-quarter adjusted earnings were $0.64 per share, ahead of the widely cited $0.62 consensus estimate and up from $0.50 a year earlier. However, Zacks reported that results fell short of its $0.73 estimate, creating a mixed earnings reaction. Herbalife earnings estimate report
• Negative Sentiment: Interim CEO John DeSimone is leading the company following leadership changes. Investors may view the CEO transition as a source of uncertainty while Herbalife works to sustain its turnaround. Herbalife leadership changes
• Negative Sentiment: Reports indicate that a softer margin outlook is clouding the otherwise improving operating trends. This could pressure future earnings even as sales volumes accelerate. Herbalife outlook report

Wall Street Analysts Forecast Growth

Several equities analysts have commented on HLF shares. Wall Street Zen cut shares of Herbalife from a "buy" rating to a "hold" rating in a research report on Sunday. Zacks Research lowered Herbalife from a "strong-buy" rating to a "hold" rating in a research report on Thursday, October 29th. Texas Capital upgraded Herbalife to a "strong-buy" rating in a research note on Thursday, September 17th. Citigroup reiterated a "buy" rating and issued a $17.00 target price (down from $21.00) on shares of Herbalife in a report on Friday, August 7th. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of Herbalife in a research note on Thursday, October 22nd. One investment analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Herbalife has an average rating of "Moderate Buy" and a consensus price target of $17.67.

Institutional Investors Weigh In On Herbalife

A number of hedge funds and other institutional investors have recently modified their holdings of HLF. Arrowstreet Capital Limited Partnership grew its stake in shares of Herbalife by 11.5% during the first quarter. Arrowstreet Capital Limited Partnership now owns 2,596,795 shares of the company's stock worth $38,225,000 after purchasing an additional 267,539 shares in the last quarter. Dimensional Fund Advisors LP lifted its holdings in Herbalife by 29.3% during the 1st quarter. Dimensional Fund Advisors LP now owns 1,877,717 shares of the company's stock worth $27,638,000 after buying an additional 425,968 shares during the last quarter. Pacer Advisors Inc. purchased a new stake in Herbalife during the 1st quarter worth about $9,491,000. Bank of New York Mellon Corp acquired a new position in shares of Herbalife during the 2nd quarter worth about $5,842,000. Finally, Squarepoint Ops LLC boosted its position in shares of Herbalife by 39.4% during the 2nd quarter. Squarepoint Ops LLC now owns 428,376 shares of the company's stock worth $5,633,000 after acquiring an additional 121,026 shares in the last quarter.

Herbalife Stock Performance

The firm has a market capitalization of $1.52 billion, a price-to-earnings ratio of 9.38, a PEG ratio of 0.44 and a beta of 0.78. The company has a 50-day moving average price of $12.73 and a 200-day moving average price of $13.99.

About Herbalife

Herbalife Ltd. NYSE: HLF is a global nutrition and wellness company that develops and distributes products through a network of independent members and distributors. Its offerings include meal-replacement shakes, protein and other dietary supplements, vitamins, sports nutrition products, and personal-care items.

Founded in 1980 by Mark Hughes, Herbalife sells its products through direct-selling channels rather than primarily through traditional retail stores. Independent distributors market the products, provide product guidance, and may operate nutrition clubs or similar community-based businesses.

The company serves customers across numerous markets in North America, Latin America, Europe, Asia-Pacific, and other regions.

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