Honest (NASDAQ:HNST) Issues Earnings Results, Meets Estimates

Honest (NASDAQ:HNST) issued its quarterly earnings data on Wednesday. The company reported $0.01 EPS for the quarter, hitting analysts’ consensus estimates of $0.01, Zacks reports. The firm had revenue of $78.10 million during the quarter, compared to the consensus estimate of $76.25 million. Honest had a positive return on equity of 3.46% and a negative net margin of 5.39%.

Here are the key takeaways from Honest’s conference call:

• Adjusted gross margin reached a record 43.5% (up ~480 bps YoY), driven by the Powering Honest Growth mix shift and favorable freight, indicating meaningful structural margin improvement.
• Consumption accelerated to 8.3% (unit consumption +20%) and organic revenue grew 3.9%, while household penetration hit a record 8.1% (+50 bps), bringing 1.6M new households over the past year.
• Wipes and personal care led growth: total wipes consumption ~25% (flushable wipes +200%, now #4) and personal care +16% (now #2 in baby personal care), supported by targeted marketing (influencer and Toy Story activations).
• Diapers remain pressured—Q1 declines moderated to -9.6% from -18.3%—and management expects the diaper category will continue to face competitive and promotional headwinds, deprioritizing it relative to higher‑margin platforms.
• Company reaffirmed FY26 framework: reported revenue down 18%–16% (due to strategic exits) with organic growth 4%–6%, adjusted gross margins in the low 40s and adjusted EBITDA $20M–$23M; balance sheet strength includes $90.4M cash, zero debt, $3.8M FCF, and ~ $11.3M of share buybacks executed/announced.

Honest Trading Down 2.0%

NASDAQ:HNST traded down $0.08 during mid-day trading on Friday, hitting $3.66. 1,748,342 shares of the company’s stock traded hands, compared to its average volume of 1,862,500. The firm has a 50 day moving average of $3.01 and a two-hundred day moving average of $2.80. Honest has a 12 month low of $2.07 and a 12 month high of $5.55. The firm has a market capitalization of $410.57 million, a price-to-earnings ratio of -21.51 and a beta of 2.15.

Analysts Set New Price Targets

A number of brokerages have issued reports on HNST. Zacks Research upgraded Honest from a “strong sell” rating to a “hold” rating in a research report on Thursday, March 26th. Morgan Stanley set a $3.40 price target on Honest in a research report on Thursday. Weiss Ratings reiterated a “sell (d+)” rating on shares of Honest in a research report on Thursday, January 22nd. Telsey Advisory Group reiterated a “market perform” rating and set a $4.00 price target on shares of Honest in a research report on Thursday. Finally, JPMorgan Chase & Co. reiterated an “underweight” rating on shares of Honest in a research report on Friday, January 16th. Two equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average target price of $3.47.

Honest announced that its Board of Directors has authorized a stock repurchase plan on Friday, February 20th that allows the company to buyback $25.00 million in shares. This buyback authorization allows the company to reacquire up to 9.9% of its stock through open market purchases. Stock buyback plans are generally an indication that the company’s leadership believes its shares are undervalued.

Insider Activity

In related news, SVP Kunssberg Etienne Von sold 12,179 shares of the stock in a transaction that occurred on Thursday, March 5th. The stock was sold at an average price of $2.85, for a total transaction of $34,710.15. Following the completion of the sale, the senior vice president owned 308,710 shares in the company, valued at $879,823.50. This represents a 3.80% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, General Counsel Brendan Sheehey sold 22,556 shares of the stock in a transaction that occurred on Thursday, March 5th. The shares were sold at an average price of $2.85, for a total value of $64,284.60. Following the sale, the general counsel owned 725,672 shares of the company’s stock, valued at approximately $2,068,165.20. The trade was a 3.01% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 191,894 shares of company stock worth $546,898 over the last 90 days. Company insiders own 9.40% of the company’s stock.

Hedge Funds Weigh In On Honest

Several large investors have recently added to or reduced their stakes in the company. Mak Capital One LLC acquired a new position in Honest in the 4th quarter valued at approximately $9,104,000. Geode Capital Management LLC raised its holdings in Honest by 1.2% in the 4th quarter. Geode Capital Management LLC now owns 2,323,572 shares of the company’s stock valued at $5,996,000 after acquiring an additional 28,579 shares in the last quarter. Dimensional Fund Advisors LP raised its holdings in Honest by 8.2% in the 3rd quarter. Dimensional Fund Advisors LP now owns 2,259,540 shares of the company’s stock valued at $8,315,000 after acquiring an additional 171,425 shares in the last quarter. Balyasny Asset Management L.P. raised its holdings in Honest by 796.2% in the 4th quarter. Balyasny Asset Management L.P. now owns 2,006,646 shares of the company’s stock valued at $5,177,000 after acquiring an additional 1,782,742 shares in the last quarter. Finally, Millennium Management LLC raised its holdings in Honest by 16.4% in the 1st quarter. Millennium Management LLC now owns 1,936,846 shares of the company’s stock valued at $9,103,000 after acquiring an additional 272,765 shares in the last quarter. Institutional investors and hedge funds own 45.54% of the company’s stock.

About Honest

The Honest Company, Inc (NASDAQ: HNST) is an American consumer goods firm specializing in eco-friendly and responsibly formulated products for babies, personal care, beauty and home cleaning. The company emphasizes transparency in ingredient sourcing and product safety, positioning itself in the premium segment of mass-market retail and direct-to-consumer channels.

Honest was founded in 2011 by actress Jessica Alba and environmental health advocate Christopher Gavigan with a mission to offer parents household and baby care items free from harsh chemicals and synthetic fragrances.