Investors in Herbalife Ltd. (NYSE:HLF) had a good week, as its shares rose 9.7% to close at US$7.32 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$1.2b were what the analysts expected, Herbalife surprised by delivering a (statutory) profit of US$0.49 per share, an impressive 22% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Herbalife after the latest results.

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Taking into account the latest results, Herbalife's three analysts currently expect revenues in 2025 to be US$4.95b, approximately in line with the last 12 months. Statutory earnings per share are forecast to plunge 31% to US$1.91 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$4.94b and earnings per share (EPS) of US$1.76 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for Herbalife

The average the analysts price target fell 7.1% to US$8.67, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Herbalife analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$7.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 0.09% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 2.3% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.0% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Herbalife to suffer worse than the wider industry.

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The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Herbalife following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Herbalife's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Herbalife analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that  Herbalife is showing  5 warning signs in our investment analysis, and 3 of those don't sit too well with us...

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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.

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