HNST - The Honest Company: Margins Are Getting Healthier

2024-05-21 02:06:25 ET

Summary

• The Honest Company manufactures and sells diapers, wipes, skincare, and household products, and focuses on clean ingredients.
• The company continues to achieve modest growth, and while earnings are still negative, good cost control, improving gross margins and operating leverage are improving earnings clearly.
• The stock still doesn't seem like an attractive investment, despite a weak stock trajectory. A faster earnings growth than I anticipate could make the stock incredibly attractive, though.

The Honest Company ( HNST ) manufactures and sells diapers and wipes with 63% of revenues in 2023, skin and personal care products with 26% of revenues in 2023, and household & wellness products with 11% of revenues in 2023 as shown in the Q1 investor presentation . The company prides itself on using clean ingredients and sustainability to combat many large competitors in the industry. Instead of having a range of brands, The Honest Company only sells its products through one brand, Honest....

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