Honest (NASDAQ:HNST) & Herbalife (NYSE:HLF) Head-To-Head Comparison

Herbalife (NYSE:HLF) and Honest (NASDAQ:HNST) are both small-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Herbalife	3.16%	-43.90%	7.89%
Honest	-3.56%	4.31%	3.33%

Valuation and Earnings

This table compares Herbalife and Honest”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Herbalife	$5.04 billion	0.29	$228.30 million	$1.55	8.93
Honest	$371.32 million	1.47	-$15.69 million	($0.11)	-45.05

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

Analyst Ratings

This is a summary of recent ratings and price targets for Herbalife and Honest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herbalife	0	3	3	2	2.88
Honest	1	5	2	1	2.33

Herbalife presently has a consensus price target of $17.67, indicating a potential upside of 27.69%. Honest has a consensus price target of $4.84, indicating a potential downside of 2.32%. Given Herbalife’s stronger consensus rating and higher probable upside, equities analysts clearly believe Herbalife is more favorable than Honest.

Institutional & Insider Ownership

45.5% of Honest shares are owned by institutional investors. 5.1% of Herbalife shares are owned by company insiders. Comparatively, 9.4% of Honest shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Herbalife has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Honest has a beta of 2.32, suggesting that its stock price is 132% more volatile than the S&P 500.

Summary

Herbalife beats Honest on 10 of the 15 factors compared between the two stocks.

About Herbalife

Herbalife Ltd. provides health and wellness products in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and the Asia Pacific. It offers products in the areas of weight management; targeted nutrition; energy, sports, and fitness; outer nutrition; and literature and promotional items. The company also provides weight management products, including meal replacement products, protein shakes, drink mixes, weight loss supplements, healthy snacks, and metabolism boosting teas; targeted nutrition products, which comprise functional beverages, and dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products, such as facial skin, body, and hair care products; and energy, sports, and fitness products, including N-R-G tea and energy drink products. In addition, it offers literature, promotional, and other materials that comprise start-up kits, sales tools, and educational materials. The company sells its products through sales representatives, independent service providers, and company-operated retail platforms. Herbalife Ltd. was formerly known as Herbalife Nutrition Ltd. and changed its name to Herbalife Ltd. in April 2023. The company was founded in 1980 and is headquartered in Los Angeles, California.

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.