The Honest Company Inc. Common Stock (HNST)

FairStock Score: 30/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for durable earnings and a margin of safety. The Honest Company sells diapers, wipes, beauty and personal-care products, but at $4.76 on 2026-10-26 the market values it at $510.7M, or 3.11 times book—a FairStock calculation. That is not a Graham-style asset bargain. The income record is uneven: in fiscal 2023 (the year ended 2023-12-31), net loss was $39.2M; in fiscal 2024 (the year ended 2024-12-31), $6.1M; and in fiscal 2025 (the year ended 2025-12-31), $15.7M. Trailing EPS is -$0.11, the FairStock P/E is -43.27, and ROE is -6.87%. The Lynch screen finds no category because of losses in each of the last four years. Yet in fiscal Q2 2026 (the quarter ended 2026-06-30), revenue was $83.3M and net income was $10.7M, or $0.09 per diluted share; fiscal Q1 2026 (the quarter ended 2026-03-31) was roughly breakeven. TTM free cash flow is $52.7M, a 10.3% FCF yield at the close. Debt is low with D/E 0.06, Altman Z is 4.03, and Piotroski is 8/9—all FairStock calculations. The problem is persistence: revenue growth is -10.87%, so the top line is shrinking, and the brand has not proven a durable moat. ROCE of 1.34% is thin. A 10.3% cash yield is attractive only if it lasts; beta of 2.24 adds volatility. I would want several quarters of stable revenue and repeatable profit before calling this a clear value opportunity.

In plain English: The Honest Company sells baby and adult personal-care products such as wipes, diapers and beauty items through stores and websites. The business looks mixed: recent quarters show a profit and strong cash generation, but revenue is shrinking and it lost money in prior years. At the $4.76 close on 2026-10-26, the price looks fair to expensive rather than clearly cheap compared with its numbers.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer