Juan Miguel Mendoza, a director at Herbalife Ltd. (NYSE:HLF), recently increased his stake in the company by purchasing a total of 5,000 shares of common stock, according to a filing with the Securities and Exchange Commission. The transactions, which took place on November 4 and November 5, were executed at prices ranging from $7.98 to $8.00 per share, amounting to a total investment of $39,950.
Following these purchases, Mendoza now directly owns 125,000 shares of Herbalife. The transactions were carried out without any involvement of equity swaps.
In other recent news, Herbalife Ltd. announced in its Q3 2024 Earnings Conference Call that it met net sales guidance with $1.2 billion and exceeded expectations with an adjusted EBITDA of $167 million. The company also reported significant strides in reducing its debt and improving its leverage ratio, along with growth in new distributor numbers. Herbalife launched new products and initiatives aimed at modernizing the brand and expanding its market reach. Despite a 3.2% year-over-year decrease in Q3 net sales, primarily due to foreign exchange headwinds and volume declines, the company's gross profit margins improved to 78.3%. The company's outlook for Q4 includes a projected net sales range from a 1% increase to a 3% decrease, with adjusted EBITDA expected between $105 million and $135 million. Full-year net sales guidance was updated to a decline of 1% to 2%, while adjusted EBITDA expectations increased to $590 million to $620 million. Herbalife aims to reduce debt by $1 billion over the next four years, supported by strong cash flows. Despite challenges in specific markets, particularly China, the company remains optimistic about future sales growth driven by an expanding distributor base and improved training programs. These are among the recent developments for Herbalife.
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 has shown significant returns over the last week and month, with a 17.67% and 17.0% price total return, respectively. This recent upward momentum could be a factor in Mendoza's decision to increase his stake.
InvestingPro Tips suggest that Herbalife is trading at a low earnings multiple, with a P/E ratio of 9.38. This valuation metric, combined with the tip that the company's valuation implies a strong free cash flow yield, may indicate that the stock is potentially undervalued. These factors could have influenced Mendoza's investment decision, as he may see potential for future appreciation.
It's worth noting that while Herbalife has shown recent positive performance, the company faces some challenges. InvestingPro Data shows that revenue growth has been negative, with a -0.55% decline in the last twelve months. Additionally, an InvestingPro Tip indicates that net income is expected to drop this year. These factors suggest that Mendoza's purchase comes at a time when the company may be navigating some headwinds.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Herbalife, providing a deeper understanding of the company's financial health and market position.
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