Honest (NASDAQ:HNST – Get Free Report) and Advantage Solutions (NASDAQ:ADV – Get Free Report) are both small-cap consumer discretionary 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 Honest and Advantage Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Honest | 1.85% | 3.86% | 2.82% |
| Advantage Solutions | -6.97% | -34.40% | -8.04% |
Volatility and Risk
Honest has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Honest | $378.34 million | 0.80 | -$6.12 million | $0.06 | 45.17 |
| Advantage Solutions | $3.57 billion | 0.08 | -$326.96 million | ($0.75) | -1.15 |
Honest has higher earnings, but lower revenue than Advantage Solutions. Advantage Solutions is trading at a lower price-to-earnings ratio than Honest, 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 Honest and Advantage Solutions, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Honest | 1 | 5 | 1 | 0 | 2.00 |
| Advantage Solutions | 1 | 0 | 1 | 0 | 2.00 |
Honest presently has a consensus price target of $4.00, indicating a potential upside of 47.60%. Advantage Solutions has a consensus price target of $2.25, indicating a potential upside of 161.51%. Given Advantage Solutions’ higher probable upside, analysts clearly believe Advantage Solutions is more favorable than Honest.
Institutional & Insider Ownership
45.5% of Honest shares are owned by institutional investors. Comparatively, 49.8% of Advantage Solutions shares are owned by institutional investors. 8.9% of Honest shares are owned by company insiders. Comparatively, 7.9% of Advantage Solutions 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.
Summary
Honest beats Advantage Solutions on 9 of the 12 factors compared between the two stocks.
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.
About Advantage Solutions
Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.
Receive News & Ratings for Honest Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Honest and related companies with MarketBeat.com's FREE daily email newsletter.
