Honest (NASDAQ:HNST) Announces Quarterly Earnings Results, Misses Estimates By $0.23 EPS

Honest (NASDAQ:HNST) issued its quarterly earnings results on Wednesday. The company reported ($0.21) earnings per share for the quarter, missing analysts’ consensus estimates of $0.02 by ($0.23), FiscalAI reports. Honest had a net margin of 1.85% and a return on equity of 3.86%. The company had revenue of $88.04 million during the quarter, compared to the consensus estimate of $88.57 million.

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

• The company has materially narrowed its portfolio by exiting apparel, Canada, and Honest.com fulfillment, right-sized SG&A, and is consolidating warehouses to focus on wipes, personal care, and diapers.
• Honest reported strong underlying demand with organic revenue of $294M (+5.3%) and consumption growth of 5% in 2025—driven by wipes (+30%) and personal care (+12%)—and guides to 4%–6% organic growth in 2026.
• Profitability is improving—adjusted gross margin 38.7% in 2025 (up 50 bps) and management expects adjusted gross margins in the low-40s in 2026, supported by the Powering Honest Growth program targeting $10M–$15M of annual savings and H2 warehouse benefits.
• The balance sheet is strong with ~$90M cash, no debt, and an inaugural $25M share repurchase authorization, giving the company flexibility to return capital while funding growth.
• Diapers—still ~30% of sales—saw double-digit consumption declines due to retailer assortment shifts, lapped promotions, and consumers trading down; management says diapers will remain a headwind in 2026 and faces a ~20%–30% price premium challenge.

Honest Price Performance

Honest stock opened at $2.31 on Thursday. The business has a 50 day simple moving average of $2.47 and a 200 day simple moving average of $3.10. The company has a market capitalization of $258.23 million, a PE ratio of 38.50 and a beta of 2.30. Honest has a one year low of $2.07 and a one year high of $5.87.

Honest declared that its board has approved a stock buyback program on Friday, February 20th that authorizes the company to buyback $25.00 million in shares. This buyback authorization authorizes the company to reacquire up to 9.9% of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s board of directors believes its shares are undervalued.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in HNST. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in shares of Honest by 6.9% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 49,916 shares of the company’s stock valued at $235,000 after purchasing an additional 3,210 shares in the last quarter. Millennium Management LLC lifted its holdings in Honest by 16.4% during the 1st quarter. Millennium Management LLC now owns 1,936,846 shares of the company’s stock valued at $9,103,000 after purchasing an additional 272,765 shares during the last quarter. Goldman Sachs Group Inc. boosted its position in Honest by 18.1% in the first quarter. Goldman Sachs Group Inc. now owns 1,064,179 shares of the company’s stock valued at $5,002,000 after buying an additional 163,380 shares in the last quarter. Creative Planning grew its stake in Honest by 183.2% during the second quarter. Creative Planning now owns 64,942 shares of the company’s stock worth $331,000 after buying an additional 42,008 shares during the last quarter. Finally, Rhumbline Advisers increased its holdings in shares of Honest by 18.1% during the second quarter. Rhumbline Advisers now owns 134,690 shares of the company’s stock worth $686,000 after buying an additional 20,603 shares in the last quarter. 45.54% of the stock is owned by institutional investors.

Analysts Set New Price Targets

A number of equities research analysts recently weighed in on HNST shares. Morgan Stanley decreased their target price on Honest from $4.25 to $3.00 and set an “equal weight” rating on the stock in a research report on Wednesday, November 19th. Telsey Advisory Group reissued a “market perform” rating and set a $3.00 price objective on shares of Honest in a report on Thursday. B. Riley Financial restated a “buy” rating on shares of Honest in a research report on Thursday, November 6th. Lake Street Capital cut Honest from a “buy” rating to a “hold” rating and set a $3.00 target price for the company. in a research report on Thursday, November 6th. Finally, Zacks Research downgraded shares of Honest from a “strong-buy” rating to a “hold” rating in a research note on Thursday, November 6th. One investment analyst has rated the stock with a Buy rating, four have given a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, Honest presently has an average rating of “Reduce” and an average price target of $3.00.

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.