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Herbalife Nutrition Ltd. (HLF) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Herbalife Nutrition Ltd. (HLF)

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Intrinsic Value (DCF)

Current$16.68
→
Intrinsic$8.99
-46%
0
$0.00$8.99$26.51
Market implies 14% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $17, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Discount ↓Growth →4%6%8%10%
8%$14$18$21$25
10%$4$7$9$11
12%$0$1$2$4
14%$0$0$0$0

Bull Case

  • Bull case ($27) offers 59% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Price reflects 14% growth expectations vs 8% historical — high bar to clear
  • Trading 46% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$176.47M
Year 2$190.59M
Year 3$205.84M
Year 4$222.30M
Year 5$240.09M
Terminal$3.53B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$163.40MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is HLF stock undervalued or overvalued?
🔴 OVERVALUED

HLF trades at $16.68 vs. our DCF-derived intrinsic value of $8.99, implying -36% downside. Using a 10.0% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($19.75) suggests limited upside.

What is HLF's intrinsic value?

Using a 5-year DCF model: Base FCF of $163M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $2.05B net debt and dividing by 0.10B shares: Bear $0.94 | Base $8.99 | Bull $19.75. Current price $16.68 implies -36% to base case.

How is HLF's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($2.97B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.