Honest Company, Inc. (HNST)
NASDAQ:HNST
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Honest Company
(NASDAQ:HNST)
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Rating:56Neutral
Price Target:
$3.50
▲(3.55% Upside)
Action:Reiterated
Date:05/13/26
The score is driven primarily by improving liquidity and cash flow with a very low-leverage balance sheet, partially offset by still-negative profitability and declining reported revenue. Earnings-call commentary supports a credible margin and cost-improvement trajectory, while technicals are broadly neutral and valuation is constrained by ongoing losses and no dividend.
Positive Factors
Balance sheet strength
Very low leverage and a cash-rich position (quarter-end cash ~$90M, zero debt) give Honest durable financial flexibility. This supports investment behind high-growth categories, execution of the buyback, and resilience to macro or tariff shocks while management pursues margin and mix improvements.
Negative Factors
Reported revenue decline from portfolio exits
Deliberate category and channel exits create persistent headline revenue volatility and reduce scale near term. While strategic, the shrinkage can pressure retail presence, negotiating leverage, and absolute EBITDA until higher-margin categories and new item velocity fully offset lost sales.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength
Very low leverage and a cash-rich position (quarter-end cash ~$90M, zero debt) give Honest durable financial flexibility. This supports investment behind high-growth categories, execution of the buyback, and resilience to macro or tariff shocks while management pursues margin and mix improvements.
Read all positive factors
Honest Company (HNST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$353.35M
Dividend YieldN/A
Average Volume (3M)1.76M
Price to Earnings (P/E)―
Beta (1Y)1.41
Revenue Growth-9.56%
EPS Growth-862.29%
CountryUS
Employees164
SectorConsumer Defensive
Sector Strength42
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.17
Shares Outstanding110,078,610
10 Day Avg. Volume2,026,164
30 Day Avg. Volume1,756,231
Financial Highlights & Ratios
PEG Ratio-0.14
Price to Book (P/B)1.69
Price to Sales (P/S)0.77
P/FCF Ratio21.08
Enterprise Value/Market Cap0.75
Enterprise Value/Revenue0.76
Enterprise Value/Gross Profit2.23
Enterprise Value/Ebitda-25.89
Forecast
1Y Price Target
$3.98Price Target Upside17.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.07
Revenue Forecast (FY)$310.11M
Honest Company Business Overview & Revenue Model
Company Description
The Honest Company, Inc. manufactures and sells diapers and wipes, skin and personal care, and household and wellness products. The company also offers baby clothing and nursery bedding products. It sells its products through digital and retail sa...
How the Company Makes Money
Honest makes money by selling branded consumer goods. Its revenue is primarily generated from product sales across its main categories (diapers and wipes, personal care, and household/cleaning). The company sells through multiple channels: (1) who...
Honest Company Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 07, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive strategic and financial narrative: despite a significant reported revenue decline driven by deliberate category and channel exits, the company demonstrated strong underlying health—organic revenue growth, record adjusted gross margins (+480 bps), robust consumption and household penetration gains, positive free cash flow, and a clean balance sheet. Operational cost reductions, targeted marketing investments behind high-growth categories (wipes and personal care), and a $10M–$15M run-rate savings program support a path to profitable, sustainable growth. Key risks include continued diaper category pressure, the near-term reported revenue volatility from the portfolio optimization, tariffs and macroeconomic uncertainties, and the need to convert new-product trials into durable velocity. On balance, the positive operational and margin improvements and cash strength outweigh the near-term top-line drag and category headwinds.Positive Updates
Organic Revenue Growth
Organic revenue grew 3.9% in Q1 to $78.1 million (reported revenue was $78.1M vs $97.3M prior year reflecting strategic category/channel exits). Management reaffirmed full-year organic revenue guidance of 4%–6%.
Negative Updates
Reported Revenue Decline Due to Portfolio Rationalization
Reported revenue declined materially year-over-year (from $97.3 million to $78.1 million; ~19.8% decline) as a result of strategic category and channel exits. Management expects full-year reported revenue declines of 16%–18% driven by those exits.
Read all updates
Q1-2026 Updates
Positive
Negative
Organic Revenue Growth
Organic revenue grew 3.9% in Q1 to $78.1 million (reported revenue was $78.1M vs $97.3M prior year reflecting strategic category/channel exits). Management reaffirmed full-year organic revenue guidance of 4%–6%.
Read all positive updates
Company Guidance
Management reaffirmed full‑year 2026 guidance calling for reported revenue declines of 18%–16% (due to strategic category/channel exits) while targeting organic revenue growth of 4%–6%, adjusted gross margins in the low‑40% range and adjusted EBITDA of $20M–$23M, with Powering Honest Growth expected to deliver $10M–$15M of annualized savings. They cited Q1 as validation for the plan: revenue of $78.1M (vs. $97.3M prior year) with 3.9% organic growth, adjusted gross margin of 43.5% (a +480 bps YoY expansion; reported gross margin 42.6%, +390 bps), Q1 adjusted EBITDA of $4M (5.1% margin) vs. $6.9M (7.1%) prior year, net loss of <$0.1M, free cash flow $3.8M (vs. –$3.0M prior year), cash of $90.4M and zero debt, plus strong consumption and household momentum (consumption +8.3%, unit consumption +20%, household penetration 8.1% up 50 bps, and 1.6M new households).Honest Company Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
72
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 352.17M | 371.32M | 378.34M | 344.37M | 313.65M | 318.64M |
| Gross Profit | 119.36M | 123.75M | 144.66M | 100.53M | 92.31M | 109.17M |
| EBITDA | -10.28M | -2.95M | 2.96M | -36.15M | -40.85M | -32.68M |
| Net Income | -18.98M | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M |
Balance Sheet | ||||||
| Total Assets | 214.92M | 225.41M | 247.39M | 201.62M | 240.60M | 272.60M |
| Cash, Cash Equivalents and Short-Term Investments | 90.37M | 89.58M | 75.44M | 32.83M | 15.17M | 93.18M |
| Total Debt | 3.08M | 4.92M | 21.74M | 29.84M | 37.53M | 37.53M |
| Total Liabilities | 45.83M | 55.74M | 73.09M | 78.48M | 94.24M | 93.49M |
| Stockholders Equity | 169.09M | 169.67M | 174.31M | 123.14M | 146.36M | 179.11M |
Cash Flow | ||||||
| Free Cash Flow | 20.40M | 13.61M | 1.01M | 17.50M | -77.89M | -38.37M |
| Operating Cash Flow | 23.58M | 15.12M | 1.54M | 19.35M | -76.28M | -38.15M |
| Investing Cash Flow | -3.18M | -1.51M | -530.00K | 3.83M | 34.96M | -8.62M |
| Financing Cash Flow | -2.85M | 535.00K | 41.60M | 122.00K | 38.00K | 60.37M |
Honest Company Technical Analysis
Positive
3.38
Price Trends
3.13
Positive
2.82
Positive
3.12
Positive
Market Momentum
0.02
Positive
47.54
Neutral
17.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HNST, the sentiment is Positive. The current price of 3.38 is below the 20-day moving average (MA) of 3.39, above the 50-day MA of 3.13, and above the 200-day MA of 3.12, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 47.54 is Neutral, neither overbought nor oversold. The STOCH value of 17.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HNST.
Honest Company Risk Analysis
Honest Company disclosed 73 risk factors in its most recent earnings report. Honest Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Honest Company Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $614.52M | 0.56 | 589.33% | 8.47% | 5.55% | 111.18% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $333.04M | 11.04 | 2.37% | ― | -2.04% | -11.43% | |
56 Neutral | $353.35M | -1,974.35 | -10.61% | ― | -9.56% | -862.29% | |
50 Neutral | $308.67M | 11.58 | -3.56% | ― | 10.09% | 99.49% | |
46 Neutral | $254.15M | -0.49 | -55.53% | ― | -9.53% | 20.64% | |
44 Neutral | $78.64M | -3.00 | -35.90% | ― | -13.58% | -4.64% |
* Consumer Defensive Sector Average
HNST
Honest Company
3.21
-1.75
-35.28%
FLWS
1-800 Flowers
3.97
-0.53
-11.69%
LE
Lands' End
10.83
2.19
25.35%
BNED
Barnes & Noble Education
9.00
-1.50
-14.29%
BWMX
Betterware de Mexico
16.50
7.97
93.32%
BARK
BARK Inc Class A
9.10
-15.50
-63.01%
Honest Company Corporate Events
Business Operations and StrategyLegal Proceedings
Honest Company Reaches Settlement in IPO Derivative Suits
Positive
May 12, 2026
On March 12, 2026, The Honest Company and various stockholder plaintiffs reached a stipulation of settlement to resolve multiple derivative actions in federal and state courts that alleged fiduciary breaches and related misconduct tied to Honest&#...
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Honest Company Reports 2025 Results, Launches Share Buyback
Positive
Feb 25, 2026
On February 24, 2026, The Honest Company’s board compensation committee adopted a new severance plan covering the CEO and other top officers, providing cash severance, prorated bonuses, extended health coverage and accelerated equity vesting...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.