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NUS Stock Trading Below 200 & 50-Day SMA: What Should You Do Now?

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Nu Skin Enterprises, Inc. (NUS - Free Report) has been seeing a rough patch, consistently trading below its 200-day and 50-day simple moving averages (SMA). As of Monday, NUS was trading at $6.40, which stands below its 200-day SMA of $12.46 and 50-day SMA of $8.60, signaling sustained bearish momentum.

SMA is a key tool in technical analysis used to assess price trends by smoothing out short-term fluctuations, offering a clearer view of the stock's longer-term direction. However, in this case, the stock’s inability to break through these key levels points to ongoing weakness in investor sentiment. This downtrend suggests that Nu Skin's near-term outlook remains unfavorable, likely driven by broader macroeconomic pressures and company-specific challenges.
 

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Image Source: Zacks Investment Research

Shares of Nu Skin have slumped 34.5% in the past three months compared with the industry’s decline of 13.8%. The company has also trailed the broader Consumer Staples sector's 6.7% increase and the S&P 500 Index's 2.5% rise over the said period.

Here’s Why Nu Skin Stock is Losing Sheen

Nu Skin has been encountering persistent macroeconomic obstacles, which continued in the second quarter of 2024. The company’s performance was hurt by continuous macroeconomic headwinds across most regions, which weighed on consumer spending and customer acquisition, especially for premium products. The company also grappled with pressures in the direct selling industry. 

These headwinds, along with foreign adverse currency fluctuations, hurt Nu Skin’s quarterly revenues, which tumbled 12.2% year over year to $439.1 million in the second quarter. On a constant-currency basis, revenues fell 8%.  Sales leaders were down 16% year over year to 38,592. Nu Skin’s customer base dropped 14% to 893,514. The company’s paid affiliates were down 17% to 155,486. On an adjusted basis, paid affiliates tumbled 9%.

The operating environment for Nu Skin's core business remains challenging, primarily due to macroeconomic factors and pressures within the direct selling industry. Considering the company’s first-half 2024 performance and rising foreign exchange headwinds, management tightened the annual guidance range for 2024 in its second-quarter earnings release.

Nu Skin now anticipates revenues in the band of $1.73-$1.81 billion for 2024, which suggests a 12-8% decline from the year-ago period’s reported figure. Earlier, the metric was expected to be in the range of $1.73-$1.87 billion. Management envisions adjusted earnings per share (EPS) of 75-95 cents. The projection suggests a decline from adjusted earnings of $1.85 recorded in 2023. 

Management had earlier envisioned an adjusted EPS of 95 cents to $1.35 for 2024. For the third quarter of 2024, the company expects revenues between $430 million and $465 million, which suggests a decline of 14% to 7% from the year-ago quarter’s reported level. The company expects adjusted earnings in the band of 15-25 cents a share in the third quarter compared with 56 cents recorded in the same period last year.

Estimates for NUS Stock: More Pain Ahead?

Over the past 60 days, the Zacks Consensus Estimate for the current and next fiscal year has declined by 29.1% and 26.6% to 78 cents per share and $1.05, respectively. This downward adjustment reflects a negative sentiment among analysts and suggests potential challenges in achieving projected profitability.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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Image Source: Zacks Investment Research

How to Play NUS Stock?

Nu Skin is going through a tough phase, with its stock reflecting macroeconomic challenges and industry-specific hurdles. While the company is taking steps to improve its standing, such as introducing new products and utilizing its Rhyz business, these efforts may take time to yield significant outcomes. Investors are advised to be cautious, keeping a close watch on whether Nu Skin’s strategies can effectively offset the ongoing pressures. Currently, Nu Skin carries a Zacks Rank #5 (Strong Sell).

Three Staple Stocks Worth Betting On

The Chef’s Warehouse (CHEF - Free Report) , which engages in the distribution of specialty food products, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CHEF has a trailing four-quarter earnings surprise of 33.7%, on average. The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.

Flowers Foods (FLO - Free Report) , a packaged bakery food company, currently carries a Zacks Rank #2. FLO has a trailing four-quarter earnings surprise of 1.9%, on average. 

The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales and earnings implies growth of around 1% and 5%, respectively, from the year-ago reported numbers.

McCormick (MKC - Free Report) is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors. It currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for McCormick & Company’s current fiscal-year earnings indicates an advancement of 5.9% from the year-ago reported figures. MKC has a trailing four-quarter earnings surprise of 13.8%, on average.


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