Although Herbalife posted rather solid results with an impressive earnings beat, investors weren’t thrilled with it. Shares of the company tumbled after the print, falling by as much as 5.29% to $54.79 per share.

Herbalife Ltd. HLF

Analysts generally agree that the results were positive, although Tim Ramey of Pivotal Research cut his price target while Scott Van Winkle and Mark Sigal of Canaccord Genuity raised their target price.

Herbalife earnings report was mixed

Herbalife posted non-GAAP earnings of $1.28 per share, beating the consensus of $1.05 per share, but digging deeper into the results reveals questions about the company’s sales progress. Currency headwinds continued to weigh heavily on the company’s results, although sales volume also fell, declining 3% compared to the guidance for a decline of 1% to 4%.

Sales declined 12.2%, which was worse than the guide of a 7% to 10% decline. However, on a currency neutral business, sales increased 5%, beating the guide for a 1% to 4% increase and demonstrating just how serious of a problem currencies are.

The number of average active sales leaders increased 4%. The company raised its full year 2015 guidance to a range of $4.65 to $4.75 per share, but its 2016 guidance was disappointing at a range of $4.35 to $4.75 per share, compared to the Wall Street estimate of $5.18 per share for 2016.

Some might find Herbalife’s China results to be encouraging, especially in light of the problems competitor Nu Skin has had there recently. Herbalife’s volumes in China increased 24%, while the number of active sales leaders climbed 31%. In North America, however, volumes declined 6% while the number of active sales leaders remained flat with last year. Volumes also declined in the Asia Pacific region, Mexico, and South and Central America.

Ramey: “We will play along”

Ramey said in his report that they will “play along” with Herbalife’s disappointing 2016 guide, which he thinks is conservative. He notes that management is factoring in a negative impact of 50 cents per share for currency headwinds, but he was disappointed with management’s answers to the questions about the low guide.

Herbalife mentioned country mix, which Ramey assumes to be service provider payments in China. He noted also that in their 2016 guide, management didn’t include the currency hedges of about 10 cents to 15 cents per share that the company had in 2015.

The Pivotal Research analyst slashed his 2016 estimate to $4.75 per share from his previous estimate of $5.60 per share. He said the numbers suggest a contraction of 70 basis points in EBIT margin next year, which he says “seems VERY conservative.” He believes Herbalife management is purposely guiding low to set the company up for a beat next year, noting that historically they have done this.

Ramey thinks Herbalife will end this year “stronger and better than it has been in years” but that currencies will continue to weigh on its growth. He cut his target price from $100 to $85 per share but still remains an outlier in terms of how high that target is.

Herbalife’s guidance “confusing”

Stifel analyst April Scee, who has a Neutral rating on Herbalife, went so far as to say that management’s guidance was “confusing” but also probably conservative. She said the guide suggests a $15 million hit from country mix for 2016 but struggles with that. She notes that the regions with higher margins, like the U.S. and Mexico, are also the slowest growing, while China, which has a different business model and accounting practices, is probably a “meaningful part” of the pressure from the country mix.

However, she also noted that the implied guide for margins was a decline of 150 to 200 basis points, which she also thinks is conservative. Management said “delta” is required to reinvest for growth, but Scee also said that in the past it can be offset through cost cutting or can drive the top line.

Scee added that it’s difficult for her to become more positive on Herbalife while the Federal Trade Commission’s investigation is hanging over it.

Canaccord Genuity ups Herbalife target

Barclays analyst Meredith Adler has a price target of $73 per share, which is closer to Ramey’s target than most other analysts. She says Herbalife is making progress and doing everything it said it would do, like controlling expenses, improving its self-manufacturing capabilities, and keeping cash in the U.S. She was encouraged by the growth in the company’s active new members in all six of its regions, noting that in the past, this has been a “good indicator of future volume growth as new members’ businesses expand over multiple years.”

Van Winkle and Sigal at Canaccord Genuity raised their price target from $58 to $61 per share and maintained their Buy rating on Herbalife. They noted that the company is almost lapping the full cycle of the changes to its marketing plans and the worst of the U.S. dollar’s strengthening. They noted that Herbalife posted strong China results but that those results weren’t as strong as they had expected them to be. They agree with Ramey that management’s 2016 guide looks conservative but add that the FTC’s investigation remains an overhang on the stock.