Juan Miguel Mendoza, a director at Herbalife Ltd. (NYSE:HLF), purchased 2,500 shares of the company's common stock on November 8, as disclosed in a recent SEC filing. The shares were acquired at an average price of $8.49, with the transaction totaling approximately $21,225. Following this purchase, Mendoza holds a total of 127,500 shares in the company. The stock purchase occurred over multiple transactions, with prices ranging from $8.25 to $8.50.
In other recent news, Herbalife Ltd. reported a steady Q3 performance, meeting its net sales guidance with $1.2 billion and surpassing expectations with an adjusted EBITDA of $167 million. The company also made significant progress in reducing its debt by $85 million and improving its leverage ratio to 3.3x, alongside a 14% year-over-year growth in new distributor numbers. Herbalife has launched new initiatives aimed at modernizing the brand and expanding its market reach, including new products and a type 2 diabetes lifestyle program.
However, Q3 net sales were down 3.2% year-over-year, primarily due to foreign exchange headwinds and volume declines, with a significant 16% year-over-year fall in China net sales. Despite these challenges, Herbalife has improved its gross profit margins to 78.3% and remains optimistic about future sales growth driven by an expanding distributor base and improved training programs.
Looking ahead, the company expects Q4 net sales to range from a 1% increase to a 3% decrease, with adjusted EBITDA projected between $105 million and $135 million. Herbalife also plans to reduce its debt by $1 billion over the next four years, supported by strong cash flows, as part of its recent developments.
InvestingPro Insights
Juan Miguel Mendoza's recent purchase of Herbalife Ltd. (NYSE:HLF) shares aligns with several positive indicators highlighted by InvestingPro. The company's stock is currently trading at a low earnings multiple, with a P/E ratio of 9.53, suggesting potential undervaluation. This is further supported by an InvestingPro Tip indicating that Herbalife's valuation implies a strong free cash flow yield.
Despite recent market challenges, Herbalife has shown resilience, with an InvestingPro Tip noting a strong return over the last month. This is corroborated by the 1-month price total return of 19.71% as of the latest data. Additionally, analysts predict the company will be profitable this year, which may have influenced Mendoza's decision to increase his stake.
The company's financial health appears stable, with a market capitalization of $828.51 million and revenue of $5000.7 million over the last twelve months as of Q3 2024. While Herbalife does not pay a dividend to shareholders, it has been profitable over the past year, which could indicate potential for future growth or reinvestment in the business.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips on Herbalife, providing deeper insights into the company's financial position and market prospects.
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