Honest (NASDAQ:HNST) Announces Earnings Results

Honest (NASDAQ:HNST) announced its quarterly earnings results on Wednesday. The company reported $0.04 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.01 by $0.03, Zacks reports. The company had revenue of $80.19 million during the quarter, compared to the consensus estimate of $77.83 million. Honest had a positive return on equity of 4.26% and a negative net margin of 3.56%.

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

• Organic growth and margins strengthened: Q2 organic revenue rose 6.7% and consumption increased nearly 8%, led by wipes and personal care. Underlying adjusted gross margin expanded to 43.8%, while underlying adjusted EBITDA margin reached a company-record 9.8%.
• Wipes and personal care continued to outperform: Wipes consumption grew 26% and personal care grew 19%, substantially ahead of their respective categories. Household penetration increased 100 basis points to 8.1%, with nearly two-thirds of the gain coming from households without children.
• Full-year outlook was raised: Honest now expects 2026 organic revenue growth of 5%-7%, adjusted EBITDA of $23 million-$25 million, and adjusted gross margins in the mid-40% range. The company plans to reinvest tariff-refund proceeds into marketing, operating capabilities, and growth initiatives.
• Balance sheet and cash generation improved: The company ended the quarter with $105.9 million in cash, no debt, and $35.3 million of year-to-date free cash flow, compared with negative free cash flow in the prior-year period. It also repurchased 5.6 million shares for $18.7 million year to date.
• Diaper-category pressure remains a headwind: Reported revenue declined 10.9% to $83.3 million, reflecting strategic exits and diaper revenue declines. Management characterized weakness across the diaper category as structural and said increased second-half marketing and capability investments will raise SG&A from Q2 levels.

Honest Stock Up 0.7%

Shares of HNST stock traded up $0.04 during trading hours on Friday, hitting $5.46. 6,741,912 shares of the company’s stock were exchanged, compared to its average volume of 1,829,129. Honest has a fifty-two week low of $2.07 and a fifty-two week high of $5.84. The firm has a market cap of $601.04 million, a P/E ratio of -49.64 and a beta of 2.12. The firm has a 50 day moving average of $3.74 and a two-hundred day moving average of $3.17.

Analyst Ratings Changes

HNST has been the topic of a number of recent analyst reports. Morgan Stanley set a $3.40 price target on shares of Honest in a report on Thursday, May 7th. Wall Street Zen raised shares of Honest from a “sell” rating to a “hold” rating in a report on Saturday, May 9th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Honest in a research report on Tuesday, May 26th. Alliance Global Partners reissued a “buy” rating on shares of Honest in a research note on Thursday. Finally, Northland Securities set a $5.50 target price on Honest in a research report on Thursday. Two 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 data from MarketBeat, the stock presently has an average rating of “Hold” and an average target price of $4.38.

Insider Activity at Honest

In other Honest news, CEO Carla Vernon sold 119,389 shares of the stock in a transaction on Wednesday, May 20th. The shares were sold at an average price of $3.14, for a total transaction of $374,881.46. Following the transaction, the chief executive officer directly owned 3,946,451 shares of the company’s stock, valued at $12,391,856.14. This trade represents a 2.94% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Stephen Winchell sold 12,886 shares of Honest stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $3.14, for a total transaction of $40,462.04. Following the completion of the sale, the insider owned 483,293 shares in the company, valued at approximately $1,517,540.02. This trade represents a 2.60% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 175,058 shares of company stock worth $550,591 over the last 90 days. 9.40% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the stock. Virtu Financial LLC acquired a new stake in Honest in the 4th quarter worth about $448,000. Invesco Ltd. boosted its stake in shares of Honest by 45.9% in the fourth quarter. Invesco Ltd. now owns 186,991 shares of the company’s stock worth $482,000 after acquiring an additional 58,784 shares during the last quarter. Inspire Investing LLC increased its position in shares of Honest by 47.1% during the fourth quarter. Inspire Investing LLC now owns 181,076 shares of the company’s stock worth $467,000 after purchasing an additional 57,956 shares in the last quarter. Balyasny Asset Management L.P. raised its stake 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 purchasing an additional 1,782,742 shares during the last quarter. Finally, Abel Hall LLC purchased a new position in Honest in the 4th quarter valued at $60,000. 45.54% of the stock is owned by hedge funds and other institutional investors.

Honest News Roundup

Here are the key news stories impacting Honest this week:

• Positive Sentiment: Raised 2026 outlook: Honest increased its full-year revenue forecast to $319 million-$325 million, above the roughly $310 million consensus estimate, and projected adjusted EBITDA of $23 million-$25 million. Honest outlines raised FY2026 outlook
• Positive Sentiment: Q2 results exceeded expectations: Reported earnings were $0.04 per share versus estimates near $0.01-$0.02, while revenue also topped consensus in company and analyst reports. Honest Q2 Earnings and Revenues Beat Estimates
• Positive Sentiment: Profitability improved materially: Gross margin expanded 800 basis points to 48.4%, adjusted EBITDA reached $7.8 million, and net income rose to $10.7 million. Cash increased to $105.9 million, supporting reinvestment and growth initiatives. The Honest Company Reports Second Quarter 2026 Results
• Positive Sentiment: Analyst estimates moved higher: Northland Securities raised its Q3 and Q4 2026 EPS forecasts to $0.03 from $0.02, reinforcing expectations for continued earnings improvement.
• Neutral Sentiment: B. Riley raised its price target to $5 from $4 and maintained a “Buy” rating, but the new target is below the recent trading level, limiting near-term upside implied by that forecast.
• Negative Sentiment: Top-line results remain mixed: Reported Q2 revenue declined year over year, despite 6.7% organic growth. Investors may also want to see more consistent operating improvement before assigning a higher valuation. The Honest Company – Awaiting More Consistent Improvements

Honest Company Profile

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.