Simple Concepts Research Group

Can This Wellness Company Continue to Deliver Strong Returns in 2021?

by | Oct 26, 2021 | Stock Picks

Mannatech Inc. (MTEX) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for Mannatech Inc. (MTEX) including an updated stock price target. Additional data on the MTEX stock earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

Mannatech Fundamentals

MTEX Stock Rating

Stock Price Target: $53.88

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Mannatech in comparison to the Household Products industry and the S&P 500.

Mannatech is a Micro Cap company with a Market Cap of $76.4M.

How are investors using Mannatech’s earnings yield to assess the company?

Mannatech Inc. (MTEX stock)_ Earnings Yield in Comparison to the Household Products Industry, S&P 500 and 10 Year Treasury Rate

The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).

The current earnings yield for MTEX stock is 42.73%%, in comparison to 3.49% for the S&P 500 and 1.66% for the 10-year treasury bond. The median earnings yield for the Household Products industry is 5.19%.

What does Mannatech’s Price-to-Earnings Ratio (P/E) tell investors about the company?

Mannatech Inc. (MTEX)_ Price-to-Earnings, Price-to-Sales and Price-to-Book Value in Comparison to the Household Products Industry & S&P 500

The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings. 

Mannatech is currently trading at a P/E of 12.85. The P/E for the Household Products industry is 31.91 and the P/E for the S&P 500 is 28.63.

What is the current Price-to-Sales Ratio (P/S) for Mannatech?

The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.

Mannatech is currently trading at a P/S of 0.60. The P/S for the Household Products industry is 3.70 and the P/S for the S&P 500 is 3.11.

How does Manntech’s Price-to-BookRatio (P/B) compare to the Household Products industry?

Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.

Mannatech P/B ratio is 3.20. The P/B for the Household Products industry is 9.06 and the P/B for the S&P 500 is 4.84.

How attractive is Mannatech’s Return on Invested Capital (ROIC) to investors?

Mannatech Inc. (MTEX)_ Return on Invested Capital in Comparison to the Household Products Industry and the S&P 500

Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.

Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.

Mannatech’s ROIC is currently 21.99% in comparison to 16.38% for the Household Products industry and 8.60% for the S&P 500.

What is Mannatech’s YTD Performance in comparison to its industry and the total market?

The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year. 

The YTD performance for Mannatech is 116.40%. The Household Products industry has a YTD performance of 23.08% in comparison to the YTD S&P 500 performance of 21.19%.

Mannatech Inc (MTEX)_ YTD Performance in Comparison to the Household Products Industry and the S&P 500

Recent Financial Results

  • Net sales reported of $80.8M, an increase of $6.5M or 8.8%, as compared to $74.3M for the same period in 2020
  • Income from operations increased to $4.8M, up from $3.1M in the same period in 2020
  • Net income of $4.3M, or $2.03 per diluted share, compared to net income of $3.9M, or $1.62 per diluted share, for the same period in 2020
  • Operating costs increased by 13.6%, to $5.4M, as compared to $4.8M for the same period in 2020 (primarily due to a $0.2 million increase in consulting fees, a $0.2 million increase in credit card fees, a $0.1 million increase in travel and entertainment costs and a $0.1 million increase in office expenses)

Stock Price Target: $53.88

Company Overview

MTEX Stock Rating

Mannatech operates as a health and wellness company worldwide. It develops, markets, and sells nutritional supplements, topical skin care and anti-aging products and weight-management products. The company primarily sells its products directly, as well as through network marketing channels and a website.

Mannatech was founded in 1993 and is headquartered in Flower Mound, Texas. The current CEO is Alfredo Bala.

Be sure to add Mannatech (MTEX stock) to your Watch List and if you haven’t done so already, check in on the performance of our Current Portfolio. Keep it simple and always do your due diligence.

This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.