Please ensure Javascript is enabled for purposes of website accessibility

Why USANA Health Sciences Stock Popped

By Jeremy Bowman - Updated Nov 17, 2016 at 4:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of USANA Health Sciences (USNA -0.58%) were looking stronger today, gaining as much as 10% after the company beat earnings estimates in its quarterly report.

So what: The nutritional and personal-care products maker said earnings per share jumped 42% to $1.28, ahead of the analyst consensus at $1.12. Management reported a 9.7% increase in sales to $169.1 million and a decrease in associate incentive payouts -- which came from a change in the employee matching program -- helped drive the strong earnings growth. An aggressive share buyback program also helped lift per-share profits as the number of shares outstanding decreased by nearly 10% from a year ago.

Now what: Revenue actually missed analyst estimates, but the market seemed to be ignoring that as USANA also raised its EPS guidance for the year to $5.25-$5.40 from $5.10-$5.25, roughly the amount of its earnings beat this quarter. Its new EPS guidance is ahead of analyst estimates at $5.18, but the midpoint of revenue guidance, which was kept at $700 million to $720 million is slightly below the Street's view at $714 million. Considering, the bulk of today's EPS growth came from buybacks and the change in the matching program, I see little reason to change your investing thesis, or in the company's prospects. Shares seem fairly priced after today's jump.

Don't miss the next dose of USANA news. Add the company to your watchlist to get all the latest updates.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

USANA Health Sciences, Inc. Stock Quote
USANA Health Sciences, Inc.
USNA
$68.28 (-0.58%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.