RLX Technology (NYSE:RLX) and Honest (NASDAQ:HNST) Head to Head Contrast

Honest (NASDAQ:HNST) and RLX Technology (NYSE:RLX) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Risk and Volatility

Honest has a beta of 2.13, suggesting that its share price is 113% more volatile than the S&P 500. Comparatively, RLX Technology has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Institutional and Insider Ownership

45.5% of Honest shares are held by institutional investors. Comparatively, 22.7% of RLX Technology shares are held by institutional investors. 9.4% of Honest shares are held by insiders. Comparatively, 53.4% of RLX Technology shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Honest and RLX Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	2	4	2	0	2.00
RLX Technology	0	2	0	0	2.00

Honest presently has a consensus target price of $3.47, indicating a potential downside of 3.84%. RLX Technology has a consensus target price of $2.50, indicating a potential upside of 34.05%. Given RLX Technology’s higher possible upside, analysts plainly believe RLX Technology is more favorable than Honest.

Valuation and Earnings

This table compares Honest and RLX Technology”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$371.32 million	1.07	-$15.69 million	($0.17)	-21.21
RLX Technology	$566.11 million	5.10	$131.83 million	$0.10	18.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Honest	-5.39%	3.52%	2.71%
RLX Technology	20.76%	6.15%	5.60%

Summary

RLX Technology beats Honest on 10 of the 13 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 RLX Technology

RLX Technology Inc., together with its subsidiaries, engages in the manufacture and sale of e-vapor products in the People's Republic of China and internationally. It serves partner distributors and retail outlets. The company was founded in 2018 and is headquartered in Beijing, China.