The Honest Company (HNST) Q3 Earnings Report Preview: What To Look For

Personal care company The Honest Company (NASDAQ:HNST) is set to release its Q3 earnings report tomorrow after the market closes. Investors are keenly watching for insights into the company's performance, especially after a strong showing last quarter where it exceeded revenue expectations by 6.8%.

Key Takeaways

• Previous Quarter Performance: The Honest Company reported revenues of $93.05 million, marking a 10.1% year-on-year increase.
• Analyst Expectations: For Q3, analysts predict a revenue growth of 7.7% year-on-year, totaling $92.8 million, with an expected adjusted loss of -$0.05 per share.
• Market Sentiment: The company has consistently beaten Wall Street's revenue estimates over the past two years, averaging a 5.9% beat.
• Peer Comparisons: Competitors like e.l.f. and Herbalife have reported mixed results, providing context for The Honest Company's upcoming performance.

Previous Quarter Highlights

In the last quarter, The Honest Company showcased remarkable growth, surpassing analysts' expectations not only in revenue but also in earnings and gross margins. The reported revenue of $93.05 million was a significant achievement, reflecting a robust 10.1% increase compared to the same period last year. This performance has set a positive tone as the company approaches its Q3 earnings report.

Analyst Predictions for Q3

As the market anticipates the upcoming earnings report, analysts have set their expectations high. Here are the key predictions:

• Revenue: Expected to reach $92.8 million, a 7.7% increase year-on-year.
• Adjusted Loss: Forecasted at -$0.05 per share.

The consistency in analysts' estimates over the past month indicates a strong belief in the company's ability to maintain its growth trajectory.

Competitive Landscape

The personal care segment has seen varied performances among its players. Notably, e.l.f. reported a staggering year-on-year revenue growth of 39.7%, exceeding expectations by 4%. In contrast, Herbalife experienced a revenue decline of 3.2%, falling short of estimates by 1%. These results have influenced market sentiment, with e.l.f. shares rising by 11.5% and Herbalife by 10.2% following their earnings announcements.

Market Performance and Investor Sentiment

Heading into the earnings report, The Honest Company has seen a positive shift in its stock price, rising 18.3% over the past month. Currently, the average analyst price target stands at $5.39, compared to the current share price of $4.40. This suggests that investors are optimistic about the company's future performance, especially given its track record of exceeding expectations.

Conclusion

As The Honest Company prepares to unveil its Q3 earnings, all eyes will be on the numbers and insights provided. With a history of outperforming expectations and a favorable market sentiment, investors are eager to see if the company can continue its upward trajectory. The upcoming report will not only reflect the company's performance but also set the tone for its future in the competitive personal care market.

Sources

• The Honest Company (HNST) Q3 Earnings Report Preview: What To Look For, Yahoo.