Honest (NASDAQ:HNST) Issues Quarterly Earnings Results

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

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 40.8%

Shares of NASDAQ HNST traded up $1.57 during trading on Thursday, reaching $5.42. 20,041,162 shares of the company traded hands, compared to its average volume of 1,186,643. The firm has a 50 day simple moving average of $3.70 and a 200-day simple moving average of $3.15. The stock has a market capitalization of $596.63 million, a PE ratio of 64.17 and a beta of 2.12. Honest has a 52-week low of $2.07 and a 52-week high of $5.84.

Honest News Roundup

Here are the key news stories impacting Honest this week:

• Positive Sentiment: Quarterly results exceeded expectations. Second-quarter revenue was $83.3 million, while earnings reached $0.04 per share, above analyst estimates near $0.01-$0.02. The Honest Company Reports Second Quarter 2026 Results
• Positive Sentiment: Growth quality and profitability improved. Organic revenue increased 6.7%, gross margin expanded 800 basis points to 48.4%, and adjusted EBITDA rose to $7.8 million, or 9.8% of revenue. Net income was $10.7 million, up $6.8 million year over year. Honest Q2 Earnings and Revenues Beat Estimates
• Positive Sentiment: Management raised its full-year outlook. Honest now expects 2026 revenue of $319 million-$325 million, above the roughly $310 million consensus forecast, and adjusted EBITDA of $23 million-$25 million. The company also highlighted $105.9 million in cash, supporting continued investment in growth. Honest Outlines Raised FY2026 Outlook
• Positive Sentiment: Analyst sentiment improved. B. Riley raised its price target from $4 to $5 and maintained a Buy rating, adding support to the bullish reaction. B. Riley Price Target Update
• Neutral Sentiment: Despite better underlying performance, reported revenue declined 10.9% year over year and the company continues to post a negative net margin. Investors may therefore seek evidence that organic growth and margin gains can remain consistent. The Honest Company – Awaiting More Consistent Improvements

Insider Activity at Honest

In other Honest news, CFO Curtiss James Bruce III sold 12,669 shares of Honest stock in a transaction that occurred on Wednesday, May 20th. The shares were sold at an average price of $3.14, for a total value of $39,780.66. Following the completion of the sale, the chief financial officer owned 526,157 shares of the company’s stock, valued at approximately $1,652,132.98. The trade was a 2.35% decrease in their position. 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 the business’s stock in a transaction on Wednesday, May 20th. The shares were sold at an average price of $3.14, for a total transaction of $40,462.04. Following the sale, the insider owned 483,293 shares of the company’s stock, valued at approximately $1,517,540.02. This represents a 2.60% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 175,058 shares of company stock valued at $550,591 over the last ninety days. Company insiders own 9.40% of the company’s stock.

Institutional Trading of Honest

Several large investors have recently modified their holdings of the company. Caitong International Asset Management Co. Ltd lifted its holdings in Honest by 1,392.2% in the third quarter. Caitong International Asset Management Co. Ltd now owns 7,073 shares of the company’s stock valued at $26,000 after acquiring an additional 6,599 shares during the period. Equity Wealth Partners LLC bought a new stake in shares of Honest during the 3rd quarter valued at about $37,000. CIBC Bancorp USA Inc. purchased a new stake in shares of Honest during the 3rd quarter valued at about $39,000. Northwestern Mutual Wealth Management Co. increased its position in shares of Honest by 85,544.4% during the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 15,416 shares of the company’s stock valued at $57,000 after purchasing an additional 15,398 shares during the last quarter. Finally, Abel Hall LLC bought a new position in shares of Honest in the 4th quarter worth approximately $60,000. Institutional investors own 45.54% of the company’s stock.

Analysts Set New Price Targets

HNST has been the topic of a number of analyst reports. Weiss Ratings reiterated a “sell (d-)” rating on shares of Honest in a research note on Tuesday, May 26th. Wall Street Zen upgraded shares of Honest from a “sell” rating to a “hold” rating in a research note on Saturday, May 9th. Alliance Global Partners reaffirmed a “buy” rating on shares of Honest in a report on Thursday. Northland Securities set a $5.50 target price on shares of Honest in a report on Thursday. Finally, Telsey Advisory Group upped their target price on shares of Honest from $4.00 to $5.00 and gave the stock a “market perform” rating in a research note on Thursday. Two investment analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of “Hold” and an average price target of $4.38.

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.