Honest Company, Inc. (HNST) stock analysis
Close on Nov 13, 2026Market cap $538.03MP/E 7.5Yield –
StockData Score
Prices as of Nov 13, 2026How the score works
Mixed12 of 30 checks passed
Honest passes 12 of the 30 checks behind our score; 12 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 2/6
- Growth
- 1/6
- Past performance
- 3/6
- Financial health
- 6/6
- Dividend
- 0/6
What stands out
No debt
Honest has no borrowings on its latest balance sheet.
Interest well covered
No meaningful interest expense to cover.
Debt covered by cash flow
There is no debt to cover.
Low bankruptcy risk
The Altman Z-score is 6.24; above 3 is the safe zone and below 1.8 the distress zone.
What to watch
Return on equity under 15%
Return on equity was 34.6% over the last twelve months and averaged -18.1% over five years; we look for 15% on both.
Return on capital under 10%
Return on invested capital was -8.0%, below the 10% that usually covers the cost of capital.
Revenue growing under 10% a year
Revenue grew 5.8% a year over the last three fiscal years, short of the 10% we look for.
Growing slower than the industry
Revenue grew -12.8% over the last twelve months; the Nonstore Retailers median is 5.9%.
Valuation2/6
P/E against its history
Not enough price and earnings history to compare.
P/E below the industry
Honest's P/E of 7.5 is below the Nonstore Retailers median of 20.0.
EV/EBITDA against its history
Needs positive EBITDA and price history.
P/B below the industry
Honest's price-to-book of 2.05 is below the Nonstore Retailers median of 3.16.
Price against fair value
We could not estimate a fair value: it needs at least two valuation methods with positive inputs.
Margin of safety
Depends on the fair value estimate.
Growth1/6
Revenue growing under 10% a year
Revenue grew 5.8% a year over the last three fiscal years, short of the 10% we look for.
EPS growth over 3 years
Needs positive EPS three years ago and today.
Earnings acceleration
Needs positive net income now, a year ago and five years ago.
Growing slower than the industry
Revenue grew -12.8% over the last twelve months; the Nonstore Retailers median is 5.9%.
Guidance raised
Honest raised its full year 2026 Revenue outlook on Aug 5, 2026.
Gross margin slipping
Gross margin was 37.6% over the last twelve months, against 38.8% a year earlier.
Past performance3/6
Return on equity under 15%
Return on equity was 34.6% over the last twelve months and averaged -18.1% over five years; we look for 15% on both.
Return on capital under 10%
Return on invested capital was -8.0%, below the 10% that usually covers the cost of capital.
Return on equity above the industry
Honest's return on equity of 34.6% is above the Nonstore Retailers median of 9.1%.
Earnings over 5 years
Needs positive net income five years ago and in the latest year.
Net margin above its 5-year average
Net margin was 23.5% over the last twelve months, against a 5-year average of -9.0%.
Net margin above the industry
Honest's net margin of 23.5% is above the Nonstore Retailers median of -0.2%.
Financial health6/6
No debt
Honest has no borrowings on its latest balance sheet.
Debt not rising
With no debt today, leverage cannot have risen.
Debt covered by cash flow
There is no debt to cover.
Interest well covered
No meaningful interest expense to cover.
Short-term assets cover short-term debts
Current assets are 4.26 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 6.24; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Honest has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itWe don't publish a fair value for Honest. It needs a US-dollar share price, at least two valuation methods with positive inputs (earnings, EBITDA, book value or sales) and, for companies with several share classes, classes that trade at the same price.
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/B at month end
- Own 5-year median 2.3
- Nonstore Retailers median 3.2
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Medium risk
- Average value traded per day
- $10.77M
- Value traded per 1% price move
- $4.81M
Downside
Medium risk
- Typical loss in a bad month
- 15.6%
- Volatility (annualized)
- 66%
- Sharpe ratio, 1 year
- 1.18
- Beta to the S&P 500 (5Y)
- 1.70
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2018 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | -1.9% | +5.8% | +4.3% | – | |
| Gross profit | -14.4% | +10.3% | +2.8% | – | |
| Free cash flow | +1246.3% | – | – | – |
Returns and balance sheet
8 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2018 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | – | 6.2% | -9.1% | |
| Return on assets | – | – | -6.6% | |
| Current ratio | – | 3.21 | 3.98 | |
| Inventory turnover | – | – | 3.1× | |
| Capex to revenue | – | 0.1% | 0.4% | |
| Diluted shares | – | 34M | 111M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Honest generated $150.44M from operations and spent $40.72M on capital expenditure, dividends and share buybacks. 14% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | -4.2% | 1.57× | 1.37× | -9.1% |
| FY2024 | -1.6% | 1.69× | 1.51× | -4.1% |
| FY2023 | -11.4% | 1.56× | 1.64× | -29.1% |
| FY2022 | -15.6% | 1.22× | 1.58× | -30.1% |
| FY2021 | -12.1% | 1.24× | -8.89× | 134.0% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero-$15.69M
- Cash generatingOperating cash flow above zero$15.12M
- Return on assets improvedROA up on the prior year-3.0% → -6.3%
- Earnings backed by cashOperating cash flow above net income$15.12M vs -$15.69M
- Less leverageLong-term debt to assets fell– → –
- Better liquidityCurrent ratio rose3.57 → 3.98
- No dilutionShare count did not rise100M → 111M
- Gross margin improvedGross margin up on the prior year38.23% → 33.33%
- More efficientAsset turnover rose1.88 → 1.50
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