The Honest Company (HNST) Q4 Earnings Report Preview: What To Look For

Personal care company The Honest Company (NASDAQ:HNST) will be reporting results tomorrow afternoon. Here’s what to look for.

The Honest Company beat analysts’ revenue expectations by 4.9% last quarter, reporting revenues of $99.24 million, up 15.2% year on year. It was an incredible quarter for the company, with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Is The Honest Company a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting The Honest Company’s revenue to grow 7.2% year on year to $96.8 million, slowing from the 10.3% increase it recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.01 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. The Honest Company has missed Wall Street’s revenue estimates three times over the last two years.

Looking at The Honest Company’s peers in the personal care segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Herbalife posted flat year-on-year revenue, beating analysts’ expectations by 0.6%, and Estée Lauder reported a revenue decline of 6.4%, topping estimates by 0.7%. Herbalife traded up 42.5% following the results while Estée Lauder was down 20.4%.

Read our full analysis of Herbalife’s results here and Estée Lauder’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the personal care stocks have shown solid performance, the group has generally underperformed, with share prices down 2.5% on average over the last month. The Honest Company is down 5.6% during the same time and is heading into earnings with an average analyst price target of $7.33 (compared to the current share price of $5.70).

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