Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><ul><li>HLF reported 4Q25 adjusted diluted EPS of $0.45 versus $0.36 in the year-ago quarter, up 25%. </li><li>Management does not provide guidance for adjusted EPS. However, 4Q25 sales and adjusted EBITDA each exceeded the top end of management’s previous expected ranges.</li><li>The company also announced that global sports icon Cristiano Ronaldo acquired a 10% equity stake in HBL Pro2col Software, LLC, which is the HLF subsidiary that holds the Pro2col technology. </li></ul></div>

HLF reported 4Q25 adjusted diluted EPS of $0.45 versus $0.36 in the year-ago quarter, up 25%. Management does not provide guidance for adjusted EPS. However, 4Q25 sales and adjusted EBITDA each exceeded the top end of management’s previous expected ranges.The company also announced that global sports icon Cristiano Ronaldo acquired a 10% equity stake in HBL Pro2col Software, LLC, which is the HLF subsidiary that holds the Pro2col technology. 

HLF: 4Q25 Upside; Underlying Momentum Continues to Build

<div><ul><li>HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years. </li><li>This marks a significant milestone after an ongoing focus on distributor recruitment, training, and technology infrastructure.</li><li>Multiple strategic initiatives converging to drive North America’s recovery.</li></ul></div>

HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years. This marks a significant milestone after an ongoing focus on distributor recruitment, training, and technology infrastructure.Multiple strategic initiatives converging to drive North America’s recovery.

HLF: WTR Small-Cap Spotlight Recap - Momentum Accelerating; Pro2col Launch Imminent

<div><ul><li>HLF delivered 3Q25 net sales growth of 2.7% Y/Y to $1,273.7MM, its first quarterly increase since 1Q24. </li><li>Ex-currency, organic sales increased 3.2% Y/Y, above the 2.5% midpoint of its guidance issued in August and the best organic growth since 2Q21.</li><li> HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide volume growth since 2Q21.</li></ul></div>

HLF delivered 3Q25 net sales growth of 2.7% Y/Y to $1,273.7MM, its first quarterly increase since 1Q24. Ex-currency, organic sales increased 3.2% Y/Y, above the 2.5% midpoint of its guidance issued in August and the best organic growth since 2Q21. HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide volume growth since 2Q21.

HLF: Momentum Accelerating; North America Returns to Growth

External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

<p>Key points <em>(machine generated)</em></p><ul><li>Herbalife is undervalued at 3.8x next year's earnings, with analysts predicting a 70-120% upside in 12-18 months due to improving fundamentals.</li><li>The company operates in 95 markets, offering a diverse range of nutrition and personal care products, with over 80% of sales from international markets.</li><li>Herbalife employs a direct-selling model and has innovated with strategies like Nutrition Clubs and Fit Camps to enhance engagement and adapt to modern compliance standards.</li></ul><p><em>This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Key points (machine generated)Herbalife is undervalued at 3.8x next year's earnings, with analysts predicting a 70-120% upside in 12-18 months due to improving fundamentals.The company operates in 95 markets, offering a diverse range of nutrition and personal care products, with over 80% of sales from international markets.Herbalife employs a direct-selling model and has innovated with strategies like Nutrition Clubs and Fit Camps to enhance engagement and adapt to modern compliance standards.This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Herbalife Ltd (HLF) - Sunday, Jul 20, 2025

Thematic (Sector/Industry)

<ul><li>The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.</li><li>Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.</li><li>Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. </li></ul>

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. 

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

United States

Herbalife Ltd. is a global nutrition company that sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products as well as personal care products. The Company distributes and sells its products through a network of independent distributors, using the direct selling channel.

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Herbalife Ltd (HLF US)

HLF: 4Q25 Upside; Underlying Momentum Continues to Build

Management does not provide guidance for adjusted EPS. However, 4Q25 sales and adjusted EBITDA each exceeded the top end of management’s previous...

Water Tower Research

HLF: WTR Small-Cap Spotlight Recap - Momentum Accelerating; Pro2col Launch Imminent

HLF reported accelerating top-line momentum globally and, notably, the first Y/Y net sales growth in the US in more than four years.

Water Tower Research

HLF: Momentum Accelerating; North America Returns to Growth

HLF has posted constant currency net sales growth in six of the last eight quarters and this quarter also marked its first quarter of Y/Y worldwide...

Water Tower Research

Herbalife Ltd (HLF) - Sunday, Jul 20, 2025

Herbalife (HLF) is undervalued at 3.8x next year's earnings, with analysts predicting a 70-120% upside in 12-18 months due to improving...

Value Investors Club (VIC)

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x...

Water Tower Research

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