The nature of investing is that you win some, and you lose some. Anyone who held Herbalife Nutrition Ltd. (NYSE:HLF) over the last year knows what a loser feels like. The share price is down a hefty 54% in that time. Even if you look out three years, the returns are still disappointing, with the share price down41% in that time. Furthermore, it’s down 16% in about a quarter. That’s not much fun for holders. Of course, this share price action may well have been influenced by the 13% decline in the broader market, throughout the period.
The recent uptick of 4.8% could be a positive sign of things to come, so let’s take a lot at historical fundamentals.
See our latest analysis for Herbalife Nutrition
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).
Even though the Herbalife Nutrition share price is down over the year, its EPS actually improved. It’s quite possible that growth expectations may have been unreasonable in the past.
By glancing at these numbers, we’d posit that the the market had expectations of much higher growth, last year. But other metrics might shed some light on why the share price is down.
Revenue was pretty flat on last year, which isn’t too bad. However, it is certainly possible the market was expecting an uptick in revenue, and that the share price fall reflects that disappointment.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Herbalife Nutrition stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While the broader market lost about 16% in the twelve months, Herbalife Nutrition shareholders did even worse, losing 54%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we’ve discovered 2 warning signs for Herbalife Nutrition that you should be aware of before investing here.
Herbalife Nutrition is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.