Honest (NASDAQ:HNST) Stock Price Down 4.6% - Should You Sell?

Key Points

• Honest shares fell 4.6% to approximately $4.84 in mid-day trading, with volume 71% below the average session level.
• Analyst sentiment is mixed but leans neutral: the consensus rating is “Hold” with a $4.84 price target, despite recent upgrades and target increases from several firms.
• The company beat quarterly expectations, reporting $0.04 in adjusted EPS versus $0.01 expected and revenue of $80.19 million versus $77.83 million; however, insiders sold roughly 294,000 shares over the past 90 days.

The Honest Company, Inc. (NASDAQ:HNST - Get Free Report) shares fell 4.6% during mid-day trading on Wednesday. The company traded as low as $4.82 and last traded at $4.8370. Approximately 547,681 shares were traded during trading, a decline of 71% from the average session volume of 1,859,806 shares. The stock had previously closed at $5.07.

Analyst Ratings Changes

A number of analysts recently weighed in on the stock. Morgan Stanley boosted their price objective on shares of Honest from $3.40 to $5.70 and gave the stock an "equal weight" rating in a research report on Wednesday, August 12th. B. Riley Financial lifted their target price on Honest from $4.00 to $5.00 and gave the company a "buy" rating in a research report on Thursday, August 6th. Freedom Capital upgraded shares of Honest from a "hold" rating to a "strong-buy" rating in a research note on Thursday, August 6th. Northland Securities set a $5.50 price objective on Honest in a report on Thursday, August 6th. Finally, Alliance Global Partners restated a "buy" rating on shares of Honest in a research report on Thursday, August 6th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $4.84.

Honest Stock Performance

The stock has a market cap of $533.34 million, a price-to-earnings ratio of -43.95 and a beta of 2.32. The business's 50 day moving average is $5.28 and its 200 day moving average is $4.19.

Honest (NASDAQ:HNST - Get Free Report) last announced its quarterly earnings results on Wednesday, August 5th. The company reported $0.04 EPS for the quarter, beating the consensus estimate of $0.01 by $0.03. The firm had revenue of $80.19 million during the quarter, compared to the consensus estimate of $77.83 million. Honest had a negative net margin of 3.56% and a positive return on equity of 4.31%. Research analysts expect that The Honest Company, Inc. will post 0.05 earnings per share for the current year.

Insider Activity

In related news, General Counsel Brendan Sheehey sold 9,664 shares of Honest stock in a transaction that occurred on Thursday, August 20th. The stock was sold at an average price of $4.99, for a total value of $48,223.36. Following the transaction, the general counsel directly owned 706,224 shares of the company's stock, valued at $3,524,057.76. The trade was a 1.35% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Carla Vernón sold 117,893 shares of the firm's stock in a transaction dated Thursday, August 20th. The stock was sold at an average price of $4.99, for a total value of $588,286.07. Following the transaction, the chief executive officer owned 3,828,558 shares in the company, valued at approximately $19,104,504.42. This trade represents a 2.99% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 294,149 shares of company stock valued at $1,503,306 in the last ninety days. Corporate insiders own 9.40% of the company's stock.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. BlackRock Inc. acquired a new position in Honest during the 2nd quarter worth approximately $25,662,000. Bank of America Corp DE purchased a new position in Honest during the 2nd quarter worth $715,000. Green Alpha Advisors LLC bought a new position in shares of Honest in the second quarter valued at approximately $1,092,000. Deutsche Bank AG bought a new stake in shares of Honest during the 2nd quarter worth $328,000. Finally, State of Wyoming purchased a new position in Honest in the second quarter valued at about $75,000. 45.54% of the stock is currently owned by institutional investors.

Honest Company Profile

The Honest Company, Inc develops and sells consumer products focused on baby care, personal care, beauty, and household needs. Its product portfolio includes diapers, wipes, skin care products, bath and body items, personal care products, and household cleaning solutions.

Founded in 2011 by Jessica Alba and Brian Lee, the company was established with an emphasis on product transparency, responsible ingredient selection, and accessible wellness-oriented goods. Honest products are sold through the company's direct-to-consumer platform and through retail partners, primarily serving customers in the United States.

The Honest Company is headquartered in Los Angeles, California, and trades on the Nasdaq under the symbol HNST.

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