Reviewing RLX Technology (NYSE:RLX) & Honest (NASDAQ:HNST)

RLX Technology (NYSE:RLX) and Honest (NASDAQ:HNST) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Earnings and Valuation

This table compares RLX Technology and Honest”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLX Technology	$566.11 million	5.08	$131.83 million	$0.10	18.55
Honest	$371.32 million	1.12	-$15.69 million	($0.17)	-22.18

RLX Technology has higher revenue and earnings than Honest. Honest is trading at a lower price-to-earnings ratio than RLX Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares RLX Technology and Honest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLX Technology	20.76%	6.15%	5.60%
Honest	-5.39%	3.52%	2.71%

Analyst Ratings

This is a summary of current ratings and target prices for RLX Technology and Honest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLX Technology	0	2	0	0	2.00
Honest	2	4	2	0	2.00

RLX Technology presently has a consensus price target of $2.50, indicating a potential upside of 34.77%. Honest has a consensus price target of $3.47, indicating a potential downside of 8.05%. Given RLX Technology’s higher probable upside, research analysts plainly believe RLX Technology is more favorable than Honest.

Institutional & Insider Ownership

22.7% of RLX Technology shares are owned by institutional investors. Comparatively, 45.5% of Honest shares are owned by institutional investors. 53.4% of RLX Technology shares are owned by insiders. Comparatively, 9.4% of Honest shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

RLX Technology has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Honest has a beta of 2.13, indicating that its stock price is 113% more volatile than the S&P 500.

Summary

RLX Technology beats Honest on 10 of the 13 factors compared between the two stocks.

About RLX Technology

RLX Technology Inc., together with its subsidiaries, engages in the manufacture and sale of e-vapor products in the People's Republic of China and internationally. It serves partner distributors and retail outlets. The company was founded in 2018 and is headquartered in Beijing, China.

About Honest

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 sales channels, such as its website and third-party ecommerce sites, as well as brick and mortar retailers. The company was incorporated in 2012 and is headquartered in Los Angeles, California.