Buy, Sell or Hold This Small Cap US Stock-HLF

Acrobull UK Advisory Services Ltd.

October 21

2024

Name	Ticker	Sector/Industry	Market Cap	Risk Factor
Herbalife Ltd.	HLF-NYSE	Consumer Defensive	$705.026 Million	Medium

Herbalife Ltd. provides health and wellness products in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and the Asia Pacific. It offers products in the areas of weight management; targeted nutrition.

Recent Highlights

Recent Happenings- Following the implementation of new engagement activities, distributor recruitment increased significantly. It is launching the Mastermind program in an effort to encourage growth among top distribution executives. In a recent earnings call, the company stated that positive outcomes from pricing and compensation improvements in Latin American countries are continuing to drive distributor growth.

Herbalife Ltd is resiliency in the face of economic adversity is bolstered by strategic initiatives focused on distributor engagement and leadership development. Its emphasis on debt reduction and expanding its global footprint demonstrates its commitment to long-term growth and financial stability. With new initiatives ready to launch and a commitment to boosting distributor success, Herbalife Ltd. (NYSE:HLF) appears to be well positioned for long-term growth.

Second Quarter 2024 Financial Highlights

Herbalife reported $1.3 billion in net sales in the second quarter of 2024, a 2.5% decrease from the previous year due to foreign currency headwinds of 270 basis points. On a constant currency basis2, net sales rose 0.2% year on year.
The second quarter gross profit margin improved to 77.9% from 77.0% in the second quarter of 2023

Gross profit margin improved by 160 basis points year over year, partially offset by 60 basis points of input cost inflation due to higher raw material costs.

Net income was $4.7 million, with a 0.4% margin and adjusted net income of $54.8 million.
Adjusted EBITDA1 of $180.0 million includes roughly $11 million in foreign currency headwinds year over year, with an adjusted EBITDA1 margin of 14.1%, up 120 basis points year on year. The diluted EPS was $0.05, with an adjusted diluted EPS1 of $0.54. This includes a $0.07 year-over-year foreign currency headwind.

Stock Observation- The company roots stay strong despite recent headwinds it has faced due to the stiff competition. We expect the company to overcome the challenges it is facing and report better financial results in the next quarter. The RSI level for the stock is at 44 which shows oversold conditions.

Risk Involved- Financial performance of the company may have an impact on the company stock performance.

Considering all the factors and financials of the company Acrobull UK maintains Buy Rating for the stock.

Disclaimer- Though our research is fundamentally and technically based on Acrobull UK only provides general advice on the stocks and it is imperative for the investors to do the risk assessment for themselves before investing as Acrobull UK would not be liable for any loss or profit arising out through the investment made by the investors on our recommendations.

It is also advisable for the investors to consult with Financial Advisor, Broker or to seek any legal assistance as the research conducted by Acrobull UK is factually based and recommendations are given in accordance with that, but it is imperative to understand that Acrobull UK does not guarantee returns.

Acrobull UK Recommendation Based on Evaluation

Current Market Price	$7.00 USD
Acrobull Recommendation	Buy at $6.80 USD
Target Price	$7.82 USD
RSI Level	14 Day RSI 42
Total Shares Outstanding	100.72 Million
Shares held by Insiders Risk Factor Stop Loss	1.72% Medium 5%