2024-07-01 08:27:11 ET
Summary
- The Honest Company has seen major margin improvements in the last quarter and it is slowly reaching profitability.
- It produces organic and natural products that have seen a spike in interest during and after the COVID-19 pandemic.
- It has to compete in a difficult market and the stock is overvalued according to the DCF model. I rate it a "Hold".
The Honest Company ( HNST ) is one of those stocks that has been on my watchlist for ages. Since it went public in 2021, the price has gone from more than $19 per share to just above $1. After a couple of positive quarters with a huge margin expansion, the company seems compelling and a lot of investors are wondering if now is the right time to invest.
Stock quotation (Author's Python file using Yfinance library)
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The Honest Company: Exciting Margin Improvement But Risky