Honest Company (HNST)
NASDAQ:HNST
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Honest Company
(NASDAQ:HNST)
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Rating:55Neutral
Price Target:
$2.50
▼(-13.19% Downside)
Action:ReiteratedDate:02/26/26
The score reflects solid balance-sheet/cash-flow progress and a cautiously positive 2026 framework (margin improvement, cost savings, and buyback), tempered by ongoing GAAP losses and margin volatility. Technicals are a notable drag with the stock trading below key moving averages and negative MACD, while valuation (P/E 37.683) is not particularly supportive given the profitability risks.
Positive Factors
Balance Sheet Strength
A cash-rich, debt-free balance sheet provides durable financial flexibility to fund transformation investments, absorb near‑term shocks, and execute the $25M repurchase. This lowers refinancing risk and supports capital allocation while the company pursues margin recovery and operational changes.
Negative Factors
Persistent GAAP Losses & Margin Volatility
Despite adjusted profitability, recurring GAAP losses and volatile margins (including one-time charges and inventory write‑downs) indicate the company has not yet achieved consistent scale or stable reported earnings, leaving equity returns and reinvestment capacity uncertain.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
A cash-rich, debt-free balance sheet provides durable financial flexibility to fund transformation investments, absorb near‑term shocks, and execute the $25M repurchase. This lowers refinancing risk and supports capital allocation while the company pursues margin recovery and operational changes.
Read all positive factors
Honest Company (HNST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$323.93M
Dividend YieldN/A
Average Volume (3M)1.84M
Price to Earnings (P/E)―
Beta (1Y)1.44
Revenue Growth3.89%
EPS GrowthN/A
CountryUS
Employees164
SectorConsumer Defensive
Sector Strength42
IndustrySpecialty Retail
Share Statistics
EPS (TTM)<0.01
Shares Outstanding112,474,220
10 Day Avg. Volume1,471,528
30 Day Avg. Volume1,843,017
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 Cap0.74
Enterprise Value/Revenue0.64
Enterprise Value/Gross Profit1.93
Enterprise Value/Ebitda-31.10
Forecast
1Y Price Target
$3.60Price Target Upside25.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.09
Revenue Forecast (FY)$308.34M
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
The Honest Company generates revenue primarily through the sale of its products across various channels, including direct-to-consumer e-commerce, retail partnerships, and wholesale distribution. Key revenue streams include the sale of baby care pr...
Honest Company Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
Balanced: The call highlighted clear signs of underlying organic strength — notably robust wipes and personal care consumption, improved adjusted margins, stronger cash flow, and a $25 million buyback authorization — and provided a constructive 2026 framework (4–6% organic growth, low-40s adjusted gross margins). However, significant short-term headwinds remain, including double-digit declines in diapers, a discrete apparel inventory write-down that pressured GAAP margins and earnings, tariff-related cost pressure, and an intentionally smaller reported top line due to strategic exits. Management emphasised that transformation-driven savings and warehouse consolidation should improve margins and efficiency (with benefits back-half 2026), but the material one-time charges and category-specific weaknesses temper the outlook.Positive Updates
Organic Revenue Growth (FY2025)
Organic revenue of $294 million, up 5.3% year-over-year, in line with the company's long-term algorithm.
Negative Updates
Reported Revenue Declines Due to Strategic Exits
Reported revenue for FY2025 was $371.3 million, down 1.9% year-over-year; Q4 reported revenue $88 million, down 11.8% YoY. Management expects reported revenue to decline ~16–18% in 2026 as a result of the business exits.
Read all updates
Q4-2025 Updates
Positive
Negative
Organic Revenue Growth (FY2025)
Organic revenue of $294 million, up 5.3% year-over-year, in line with the company's long-term algorithm.
Read all positive updates
Company Guidance
The company guided to 2026 organic revenue growth of 4%–6% (while reported revenue is expected to decline roughly 18%–16% due to strategic exits), adjusted gross margins in the low-40% range (versus 2025 adjusted gross margin of 38.7%), and adjusted EBITDA of $20M–$23M; management expects sequential improvement through the year with positive year‑over‑year organic growth in Q1, tariff headwinds easing after Q2, and supply‑chain/fulfillment savings from the Powering Honest Growth program (expected to deliver $10M–$15M of annualized savings) to materialize in H2. The board approved a $25M share repurchase program, and the company finished 2025 with ~ $89.6–$90M cash, no debt, $13.6M free cash flow, and roughly $21.8–$22M of adjusted EBITDA—metrics management cited as the foundation for the 2026 outlook.Honest Company Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 371.32M | 378.34M | 344.37M | 313.65M | 318.64M |
| Gross Profit | 123.75M | 144.66M | 100.53M | 92.31M | 109.17M |
| EBITDA | -2.95M | 2.96M | -36.15M | -40.85M | -32.68M |
| Net Income | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M |
Balance Sheet | |||||
| Total Assets | 225.41M | 247.39M | 201.62M | 240.60M | 272.60M |
| Cash, Cash Equivalents and Short-Term Investments | 89.58M | 75.44M | 32.83M | 15.17M | 93.18M |
| Total Debt | 4.92M | 21.74M | 29.84M | 37.53M | 37.53M |
| Total Liabilities | 55.74M | 73.09M | 78.48M | 94.24M | 93.49M |
| Stockholders Equity | 169.67M | 174.31M | 123.14M | 146.36M | 179.11M |
Cash Flow | |||||
| Free Cash Flow | 13.61M | 1.01M | 17.50M | -77.89M | -38.37M |
| Operating Cash Flow | 15.12M | 1.54M | 19.35M | -76.28M | -38.15M |
| Investing Cash Flow | -1.51M | -530.00K | 3.83M | 34.96M | -8.62M |
| Financing Cash Flow | 535.00K | 41.60M | 122.00K | 38.00K | 60.37M |
Honest Company Technical Analysis
Positive
2.88
Price Trends
2.55
Positive
2.63
Positive
3.40
Negative
Market Momentum
0.09
Negative
58.06
Neutral
73.92
Neutral
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 2.88 is above the 20-day moving average (MA) of 2.82, above the 50-day MA of 2.55, and below the 200-day MA of 3.40, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 58.06 is Neutral, neither overbought nor oversold. The STOCH value of 73.92 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $629.53M | 0.38 | 87.45% | 8.47% | -7.03% | 1.04% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
58 Neutral | $418.22M | 98.91 | 2.37% | ― | -8.47% | ― | |
55 Neutral | $323.93M | -18.29 | -8.63% | ― | 3.89% | ― | |
50 Neutral | $299.06M | 11.58 | -3.56% | ― | 1.38% | 63.65% | |
47 Neutral | $198.60M | 0.88 | -67.22% | ― | -8.07% | -2206.16% | |
46 Neutral | $94.02M | -3.00 | -35.90% | ― | -7.61% | -18.41% |
* Consumer Defensive Sector Average
HNST
Honest Company
2.88
-1.82
-38.72%
FLWS
1-800 Flowers
3.10
-2.80
-47.46%
LE
Lands' End
13.60
3.42
33.60%
BNED
Barnes & Noble Education
8.72
-1.78
-16.95%
BWMX
Betterware de Mexico
16.87
6.47
62.13%
BARK
BARK Inc Class A
0.54
-0.85
-60.86%
Honest Company Corporate Events
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.