Herbalife (NYSE:HLF) Shares Gap Up – Should You Buy?

Herbalife Ltd (NYSE:HLF) gapped up prior to trading on Tuesday . The stock had previously closed at $12.38, but opened at $13.00. Herbalife shares last traded at $12.4650, with a volume of 402,046 shares changing hands.

Key Headlines Impacting Herbalife

Here are the key news stories impacting Herbalife this week:

• Positive Sentiment: Herbalife authorized a $250 million share-repurchase program over three years. The company cited confidence in its strategy, financial outlook and ability to generate sustainable free cash flow. The authorization could cover up to approximately 19.3% of outstanding shares, potentially supporting earnings per share and signaling that management believes the stock is undervalued. Herbalife Announces $250 Million Share Repurchase Program
• Positive Sentiment: Reports on the buyback said HLF shares moved higher as investors viewed the authorization as a favorable use of the company’s cash flow and an indication that the board sees attractive value at current prices. Herbalife Launches $250 Million Stock Buyback
• Neutral Sentiment: Herbalife presented at Barclays’ 19th Annual Global Consumer Staples Conference. The transcript gives investors additional access to management’s discussion of the business, strategy and outlook, although no specific new financial guidance is identified in the available headline. Herbalife Barclays Conference Transcript
• Neutral Sentiment: A broader Seeking Alpha feature discusses consumer-staples companies combining revenue growth with highly rated valuations. The theme may help frame interest in HLF, but the headline does not provide company-specific operating updates. Consumer Staples Stocks With Growth and Valuations

Analyst Ratings Changes

A number of equities analysts have recently issued reports on the stock. Wall Street Zen lowered shares of Herbalife from a “buy” rating to a “hold” rating in a research report on Saturday, August 8th. Citigroup reiterated a “buy” rating and issued a $17.00 price target (down from $21.00) on shares of Herbalife in a research report on Friday, August 7th. Finally, Weiss Ratings downgraded shares of Herbalife from a “hold (c+)” rating to a “hold (c)” rating in a research report on Friday, July 24th. Three research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus price target of $17.00.

Herbalife Stock Up 1.5%

The company has a market cap of $1.32 billion, a price-to-earnings ratio of 8.14, a P/E/G ratio of 0.41 and a beta of 0.85. The business has a fifty day simple moving average of $12.36 and a 200 day simple moving average of $13.75.

Herbalife (NYSE:HLF) last announced its quarterly earnings results on Thursday, August 6th. The company reported $0.51 earnings per share for the quarter, missing analysts’ consensus estimates of $0.54 by ($0.03). Herbalife had a net margin of 3.16% and a negative return on equity of 43.90%. The firm had revenue of $1.33 billion during the quarter, compared to analysts’ expectations of $1.31 billion. During the same quarter in the prior year, the business earned $0.59 EPS. The company’s quarterly revenue was up 5.4% compared to the same quarter last year. Equities analysts anticipate that Herbalife Ltd will post 2.68 EPS for the current fiscal year.

Herbalife announced that its Board of Directors has initiated a share repurchase program on Tuesday, September 8th that allows the company to repurchase $250.00 million in outstanding shares. This repurchase authorization allows the company to purchase up to 19.3% of its shares through open market purchases. Shares repurchase programs are often an indication that the company’s management believes its shares are undervalued.

Institutional Trading of Herbalife

A number of institutional investors and hedge funds have recently made changes to their positions in the company. Caitong International Asset Management Co. Ltd purchased a new position in shares of Herbalife in the 4th quarter valued at $32,000. KBC Group NV purchased a new stake in Herbalife during the 1st quarter worth $44,000. EverSource Wealth Advisors LLC boosted its position in Herbalife by 512.7% during the 4th quarter. EverSource Wealth Advisors LLC now owns 6,544 shares of the company’s stock worth $84,000 after purchasing an additional 5,476 shares during the period. Advisory Services Network LLC purchased a new stake in Herbalife during the 3rd quarter worth $65,000. Finally, Quarry LP increased its holdings in Herbalife by 49,105.3% in the 3rd quarter. Quarry LP now owns 9,349 shares of the company’s stock valued at $79,000 after purchasing an additional 9,330 shares in the last quarter.

About Herbalife

Herbalife Nutrition Ltd. (NYSE: HLF) operates as a global multi-level marketing company specializing in weight-management, nutritional supplement, sports nutrition and personal care products. Its portfolio includes protein shakes, vitamins, energy and fitness supplements, hydration products and skin and hair care items, all formulated to support wellness, performance and healthy living. Products are manufactured in GMP-certified facilities to ensure consistent quality and safety standards.

Founded in 1980 by Mark R.