Herbalife (HLF) stock: Technicals point to a 62% dive

Core Insights - Herbalife's stock price has significantly declined, dropping over 31% in one day and more than 86% from its peak in February 2021, marking a vindication for Bill Ackman, who previously shorted the stock [1][2] Financial Performance - Herbalife's annual revenue decreased from over $5.54 billion in 2020 to $5.06 billion in the trailing twelve months [2] - The company's net profit fluctuated, rising from $372 million in 2020 to over $447 million in 2021, then falling to $312 million and $142 million in the subsequent two years [2] Debt and Valuation - Herbalife's short-term debt has increased to over $309 million, while long-term debt stands at over $2.2 billion, although it has $575 million in cash to cover debt servicing [4] - The company is currently trading at 4.24 times forward earnings, significantly lower than the sector median of 17.62, and its forward EV to EBITDA is 5.28, compared to the sector median of 11.2 [4] Stock Outlook - The stock has formed a near double-top pattern between 2019 and 2021, with bearish signals indicated by moving averages [6] - The next critical price level to watch is $2.99, which is approximately 62% below the current level, potentially moving the stock into penny stock territory [6]