The Honest Company, Inc. (NASDAQ:HNST) Just Reported And Analysts Have Been Lifting Their Price Targets
The investors in The Honest Company, Inc.'s (NASDAQ:HNST) will be rubbing their hands together with glee today, after the share price leapt 45% to US$4.42 in the week following its annual results. It was a respectable set of results; while revenues of US$344m were in line with analyst predictions, statutory losses were 16% smaller than expected, with Honest Company losing US$0.42 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Honest Company
Taking into account the latest results, the current consensus from Honest Company's five analysts is for revenues of US$356.9m in 2024. This would reflect an okay 3.6% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 46% to US$0.22. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$352.3m and losses of US$0.23 per share in 2024. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
These new estimates led to the consensus price target rising 67% to US$4.44, with lower forecast losses suggesting things could be looking up for Honest Company. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Honest Company, with the most bullish analyst valuing it at US$5.75 and the most bearish at US$4.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.6% growth on an annualised basis. That is in line with its 3.6% annual growth over the past three years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.2% annually. So it's pretty clear that Honest Company is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Honest Company's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Honest Company. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Honest Company analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for Honest Company you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
