US$6.86 - That's What Analysts Think The Honest Company, Inc. (NASDAQ:HNST) Is Worth After These Results

Shareholders will be ecstatic, with their stake up 54% over the past week following The Honest Company, Inc.'s (NASDAQ:HNST) latest quarterly results. Revenues of US$99m beat analyst forecasts by6.9%, while the business broke even in terms of statutory earnings per share (EPS). Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Honest Company

Taking into account the latest results, the most recent consensus for Honest Company from eight analysts is for revenues of US$396.6m in 2025. If met, it would imply a reasonable 7.5% increase on its revenue over the past 12 months. Honest Company is also expected to turn profitable, with statutory earnings of US$0.023 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$386.7m and losses of US$0.021 per share in 2025. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small increase to revenue expectations.

It will come as no surprise to learn that the analysts have increased their price target for Honest Company 27% to US$6.86on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Honest Company, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$5.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We can infer from the latest estimates that forecasts expect a continuation of Honest Company'shistorical trends, as the 6.0% annualised revenue growth to the end of 2025 is roughly in line with the 6.1% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.8% annually. It's clear that while Honest Company's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that the analysts now expect Honest Company to become profitable next year, compared to previous expectations that it would report a loss. They also upgraded their revenue forecasts, although the latest estimates suggest that Honest Company will grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Honest Company going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Honest Company that we have uncovered.

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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.