Taking everything into account, HLF scores 6 out of 10 in our fundamental rating. HLF was compared to 37 industry peers in the Personal Care Products industry. HLF scores excellent on profitability, but there are some minor concerns on its financial health. HLF scores decently on growth, while it is valued quite cheap. This could make an interesting combination.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

HLF had positive earnings in the past year.
HLF had a positive operating cash flow in the past year.
HLF had positive earnings in each of the past 5 years.
Each year in the past 5 years HLF had a positive operating cash flow.

1.2 Ratios

HLF's Return On Assets of 11.89% is amongst the best of the industry. HLF outperforms 86.49% of its industry peers.
HLF's Return On Invested Capital of 25.82% is amongst the best of the industry. HLF outperforms 94.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HLF is significantly above the industry average of 11.85%.
The last Return On Invested Capital (25.82%) for HLF is above the 3 year average (21.47%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	11.89%
ROE	N/A
ROIC	25.82%

ROA(3y)8.71%

ROA(5y)10.82%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)21.47%

ROIC(5y)23.4%

1.3 Margins

HLF has a better Profit Margin (6.46%) than 72.97% of its industry peers.
In the last couple of years the Profit Margin of HLF has declined.
HLF's Operating Margin of 12.61% is fine compared to the rest of the industry. HLF outperforms 78.38% of its industry peers.
HLF's Operating Margin has declined in the last couple of years.
HLF's Gross Margin of 77.96% is amongst the best of the industry. HLF outperforms 89.19% of its industry peers.
HLF's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	12.61%
PM (TTM)	6.46%
GM	77.96%

OM growth 3Y-9.16%

OM growth 5Y-4.06%

PM growth 3Y-12.9%

PM growth 5Y-4.4%

GM growth 3Y-0.32%

GM growth 5Y-0.62%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HLF is creating value.
HLF has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HLF has been reduced compared to 5 years ago.
Compared to 1 year ago, HLF has an improved debt to assets ratio.

2.2 Solvency

HLF has an Altman-Z score of 2.63. This is not the best score and indicates that HLF is in the grey zone with still only limited risk for bankruptcy at the moment.
HLF has a Altman-Z score of 2.63. This is comparable to the rest of the industry: HLF outperforms 59.46% of its industry peers.
The Debt to FCF ratio of HLF is 9.30, which is on the high side as it means it would take HLF, 9.30 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HLF (9.30) is better than 62.16% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	9.3
Altman-Z	2.63

ROIC/WACC3.21

WACC8.04%

2.3 Liquidity

A Current Ratio of 1.11 indicates that HLF should not have too much problems paying its short term obligations.
HLF has a worse Current ratio (1.11) than 75.68% of its industry peers.
HLF has a Quick Ratio of 1.11. This is a bad value and indicates that HLF is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of HLF (0.59) is worse than 72.97% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.11
Quick Ratio	0.59

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 8.51% over the past year.
HLF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.08% yearly.
HLF shows a decrease in Revenue. In the last year, the revenue decreased by -0.78%.
Measured over the past years, HLF shows a small growth in Revenue. The Revenue has been growing by 0.47% on average per year.

EPS 1Y (TTM)8.51%

EPS 3Y-25.39%

EPS 5Y-7.08%

EPS Q2Q%-12.28%

Revenue 1Y (TTM)-0.78%

Revenue growth 3Y-4.89%

Revenue growth 5Y0.47%

Sales Q2Q%2.69%

3.2 Future

Based on estimates for the next years, HLF will show a very strong growth in Earnings Per Share. The EPS will grow by 21.64% on average per year.
The Revenue is expected to grow by 2.48% on average over the next years.

EPS Next Y8.03%

EPS Next 2Y15.87%

EPS Next 3Y21.64%

EPS Next 5YN/A

Revenue Next Year0.38%

Revenue Next 2Y1.67%

Revenue Next 3Y2.48%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 8.53, the valuation of HLF can be described as reasonable.
Based on the Price/Earnings ratio, HLF is valued cheaply inside the industry as 89.19% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.41. HLF is valued rather cheaply when compared to this.
HLF is valuated cheaply with a Price/Forward Earnings ratio of 6.61.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HLF indicates a rather cheap valuation: HLF is cheaper than 91.89% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.64, HLF is valued rather cheaply.

		Industry Rank	Sector Rank
PE	8.53
Fwd PE	6.61

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HLF is valued cheaply inside the industry as 89.19% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HLF is valued cheaper than 94.59% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	8.28
EV/EBITDA	4.68

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HLF may justify a higher PE ratio.
HLF's earnings are expected to grow with 21.64% in the coming years. This may justify a more expensive valuation.