NUS

Nu Skin ($NUS) CPO Buys Shares Again After 5 Months...EPS Doubles Amid Undervaluation Recovery Hopes

11/12/2025 21:40

Nu Skin Enterprises ($NUS) Chief Product Officer Steven Hatchett purchased 5,500 shares at $9.61 per share on November 11, investing approximately $53,000. This marks his second purchase this year following a May transaction, demonstrating continued executive confidence in the company's prospects. Nu Skin, founded in 1984 and headquartered in Utah, is a beauty and wellness company that distributes products ranging from ageLOC LumiSpa skincare devices to Pharmanex nutritional supplements through direct selling channels globally. With approximately 3,100 full-time employees, the company operates through multiple channels including retail stores, e-commerce, and independent distributors worldwide. Hatchett's purchase comes amid challenging times for the company. Third-quarter revenue declined 15.3% year-over-year to $364.21 million, missing analyst estimates. Annual revenue of $1.56 billion reflects a continued downward trend, raising concerns about top-line growth momentum. However, profitability metrics tell a completely different story. Third-quarter earnings per share doubled to $0.34 compared to the prior year, with quarterly EPS growth reaching an impressive 105.7%. This surge reflects operational efficiency improvements and strong growth in Latin America, demonstrating management's ability to enhance profitability despite revenue headwinds. Stock performance has reflected this earnings improvement. After falling from around $13 in June 2024 to the $6 range by October, shares began a notable recovery in August 2025. The stock surged to $10.53 on August 11 and has since traded in the $11-12 range, posting a 52-week gain of nearly 28% that significantly outperforms the S&P 500's 14.39% return. From a valuation perspective, Nu Skin appears quite attractive. The trailing price-to-earnings ratio stands at just 4.37 times, while the price-to-book ratio of 0.58 times suggests trading below book value. The enterprise value-to-EBITDA multiple of 2.63 times is notably low compared to industry peers including Coty, Helen of Troy, and The Estée Lauder Companies, indicating significant undervaluation relative to competitors. Financial health metrics remain solid. Cash reserves of $253 million and levered free cash flow of $165.41 million demonstrate stable cash generation capabilities. The debt-to-equity ratio of 40.04% represents manageable leverage, while the current ratio of 2.15 times indicates adequate short-term liquidity. Return on equity of 14.55% shows efficient utilization of shareholder capital. Institutional investors recognize Nu Skin's potential, with institutional ownership reaching 76.75%, reflecting strong confidence from professional investors. Short interest remains moderate at 4.7%, suggesting no excessive bearish sentiment. However, insider ownership of just 2.19% presents some concern regarding management alignment with shareholder interests. Current U.S. market conditions present both opportunities and risks for small-cap stocks like Nu Skin. Consumer sentiment plunged to 50.3 in late 2025, down nearly 30% year-over-year amid ongoing government shutdown concerns. However, consumers with significant stock holdings remain relatively optimistic due to strong equity markets, and undervalued small-cap stocks with insider buying are attracting attention in this environment. The key catalyst to watch is fourth-quarter earnings. Management has provided revenue guidance of $365-400 million for Q4, representing flat to modest improvement from Q3 levels. New growth initiatives including expansion into India and the Prysm iO product launch could potentially drive revenue recovery. Hatchett's consecutive purchases carry significance beyond symbolic value. For a CPO to buy shares twice within five months demonstrates conviction about the product lineup and market prospects, particularly when executed during a period of relative stock weakness. While Nu Skin presents conflicting signals of declining revenue and improving profitability, current valuation metrics and management actions suggest potential for undervaluation correction. However, risks including regulatory changes affecting direct selling models and evolving consumer spending patterns require ongoing monitoring.