Nu Skin Enterprises Inc.
) has outperformed the Zacks Consensus Estimate in the past 4
quarters with an average surprise of nearly 10%. As a result, all
earnings estimates for this anti-aging personal care products
company have been on the rise of late. It also recently reached a
52-week high and has a potential long-term earnings growth rate of
This Zacks #2 Rank (Buy) has a compelling valuation, including a
price-to-sales (P/S) ratio of just 0.98, which makes it an
attractive pick for value investors.
Solid Third Quarter Results
On October 31, Nu Skin Enterprises Inc. reported third quarter
earnings of 87 cents per share, topping the Zacks Consensus
Estimate by 13% and improving year over year by nearly 21%. The
increase in earnings was led by strong top-line growth.
Despite a 3% negative impact of foreign currency translation, total
sales of $526.2 million comfortably surpassed the Zacks Consensus
Estimate of $481 million and surged 23% from $428.4 million a year
ago. The strong demand for anti-aging products and innovations
facilitated top-line growth.
Nu Skin Enterprises believes that it will sustain the same rhythm
in the remaining quarter of 2012, counting upon its compelling
products lineup. Management raised its 2012 earnings guidance to
between $3.33 and $3.37 per share, compared with the previous
forecast of $3.16 to $3.24. The sales outlook was boosted to
between $2.10 billion and $2.11 billion, instead of $2.00 billion
to $2.03 billion previously.
For the fourth quarter 2012, the company expects earnings of 78
cents to 82 cents per share and sales at $520 million to $530
The company projects annual revenue between $2.25 billion and $2.30
billion for 2013, up 8% to 10% on a constant currency basis from
the 2012 level. Earnings per share are estimated at $3.70 to $3.85,
an increase of 10% to 15%.
Rising Earnings Estimates
The Zacks Consensus Estimate for 2012 remains at $3.38 per share,
suggesting year-over-year growth of 17.2%. The Zacks Consensus
Estimate for 2013 is at $3.86 per share, reflecting a
year-over-year increase of 14.4%.
Along with a low P/S multiple, Nu Skin has a low P/E ratio of 10.22
and a trailing 12-month P/E of 10.43 (a P/E ratio under 15.0 and a
P/S ratio below 1.0 generally indicate value). The return on equity
(ROE) also looks attractive. It has a trailing 12-month ROE of
36.6% compared with the peer group average of 24.8%.
Shares of Nu Skin have been rising since late-December 2012. The
year-to-date return for the stock is 4.83% compared with the
S&P 500's return of 1.69%. Volume is averaging roughly 1,947K
Nu Skin Enterprises is a provider of anti-aging personal care
products and nutritional supplements under the Nu Skin and
Pharmanex brands. The company distributes its products in Greater
China, South Asia/Pacific, the Americas, Europe and North Asia,
principally through approximately 900,000 active distributors. Nu
Skin Enterprises, which competes with Avon Products Inc. (
), currently has a market cap of $2.17 billion.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades are
about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called
NU SKIN ENTERP (NUS): Free Stock Analysis
To read this article on Zacks.com click here.