Why Herbalife (HLF) Stock Is Up Today

What Happened?

Shares of health and wellness products company Herbalife (NYSE:HLF) jumped 44.6% in the afternoon session after the company reported impressive fourth-quarter results, which blew past analysts' EPS and EBITDA estimates. On the other hand, revenue guidance for the next quarter missed expectations, with sales projected to decline between 5.5% and 1.5% y/y. Full-year EBITDA guidance also fell short of Wall Street's estimates, raising concerns about the company's ability to sustain its margins and profits. Overall, this was a solid quarter. Separately, the company announced that Stephan Gratziani is stepping into the CEO's chair, replacing Michael Johnson, who will transition to the role of Executive Chairman.

The shares closed the day at $8.01, up 42.5% from previous close.

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What The Market Is Telling Us

Herbalife’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Herbalife and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 10 months ago when the stock gained 14.5% on the news that the company reported strong first quarter results which blew past analysts' EPS expectations. On the other hand, its organic revenue unfortunately missed analysts' expectations. That didn't matter too much, however, as Herbalife's guidance was the star of the show - the company raised its adjusted EBITDA outlook and lowered its capital expenditure forecast, both of which beat analysts' estimates. It also completed a $1.6 billion refinancing on April 12th. Overall, this quarter's results were solid.

Herbalife is up 18.9% since the beginning of the year, but at $7.94 per share, it is still trading 36.4% below its 52-week high of $12.49 from July 2024. Investors who bought $1,000 worth of Herbalife’s shares 5 years ago would now be looking at an investment worth $209.78.

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