The Honest Company

HNST

Specialty Retail · Consumer Cyclical

Price

$3.83

-0.09 (-2.30%)

Market Cap

$421.6M

Exchange

NASDAQ

Winston Score

Winston is worried

Weak fundamentals across most pillars.

Share count rising — dilution

+56.4% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 71.1M (2021) → 111.2M (2025)

The Honest Company, Inc. manufactures and sells diapers and wipes, skin and personal care, and household and wellness products. The company also offers baby clothing and nursery bedding products. It sells its products through digital and retail sales channels, such as its website and third-party ecommerce sites, as well as brick and mortar retailers. The company was incorporated in 2012 and is headquartered in Los Angeles, California.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-19.7% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-101.3% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$7M/ year

↑ Rising (+7% vs prior year)

2.0% of revenue

Below sector average (4%)

R&D investment increasing — building for the future

Insider Activity

9.7%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$90M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

The Honest Company's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

42.6%

Healthy — 42.6% gross margin

Operating Margin

-0.8%

Losing money on operations — -0.8%

ROCE

-0.4%

Weak — -0.4% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

-9.6%

Shrinking sales (-9.6% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

N/A

Data not available

FCF Margin

5.8%

Thin free cash flow (5.8%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.02

Conservative — low debt load (0.02)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

N/M

Negative earnings — P/E not meaningful

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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