The Honest Company's (NASDAQ:HNST) Q2 Sales Beat Estimates But Stock Drops
Is now the time to buy The Honest Company? Find out in our full research report.
The Honest Company (HNST) Q2 CY2025 Highlights:
Revenue: $93.46 million vs analyst estimates of $92.12 million (flat year on year, 1.5% beat)
EPS (GAAP): $0.03 vs analyst estimates of $0.01 ($0.02 beat)
Adjusted EBITDA: $7.62 million vs analyst estimates of $6.64 million (8.2% margin, 14.7% beat)
EBITDA guidance for the full year is $28.5 million at the midpoint, below analyst estimates of $28.83 million
Operating Margin: 3.1%, up from -4.3% in the same quarter last year
Free Cash Flow was -$826,000, down from $2.93 million in the same quarter last year
Market Capitalization: $498.3 million
'For our second quarter 2025, we were able to drive profitability improvement, gross margin expansion and revenue growth, resulting in positive net income for the second consecutive quarter,' said Chief Executive Officer, Carla Vernón.
Company Overview
Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.
Revenue Growth
A company's long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $389.8 million in revenue over the past 12 months, The Honest Company is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.
As you can see below, The Honest Company's 7.9% annualized revenue growth over the last three years was decent. This shows its offerings generated slightly more demand than the average consumer staples company, a useful starting point for our analysis.
This quarter, The Honest Company's $93.46 million of revenue was flat year on year but beat Wall Street's estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products will see some demand headwinds.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
Cash Is King
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
The Honest Company has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.6%, subpar for a consumer staples business.
Taking a step back, we can see that The Honest Company's margin dropped by 6.6 percentage points over the last year. Almost any movement in the wrong direction is undesirable because of its already low cash conversion. If the trend continues, it could signal it's becoming a more capital-intensive business.
The Honest Company broke even from a free cash flow perspective in Q2. The company's cash profitability regressed as it was 4 percentage points lower than in the same quarter last year, suggesting its historical struggles have dragged on.
Key Takeaways from The Honest Company's Q2 Results
We were impressed by how significantly The Honest Company blew past analysts' EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street's estimates by a wide margin. On the other hand, its full-year EBITDA guidance slightly missed, and this is weighing on shares. The stock traded down 8.9% to $4.13 immediately following the results.
Is The Honest Company an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
14 minutes ago
- Yahoo
Kenvue meets profit estimates amid strategic review
(Reuters) -Kenvue reported a second-quarter profit largely in line with Wall Street estimates on Thursday, amid a strategic review at the consumer health company. The company posted an adjusted profit of 29 cents per share, compared with analysts' average estimate of 28 cents per share, according to data compiled by LSEG.
Yahoo
14 minutes ago
- Yahoo
West Point Gold Engages VRIFY to Accelerate Exploration and Unlock Discovery at Gold Chain Project
Vancouver, British Columbia--(Newsfile Corp. - August 7, 2025) - West Point Gold Corp. (TSXV: WPG) (OTCQB: WPGCF) (FSE: LRA0) ("West Point Gold" or the "Company") is pleased to announce that it has engaged VRIFY Technology Inc. ("VRIFY"), the leading provider of AI-assisted mineral discovery and 3D project visualization, to support and accelerate its exploration efforts across its Gold Chain Project in Arizona. West Point will harness VRIFY's full suite of products to maximize the value of its extensive datasets to drive smarter, faster discovery outcomes. DORA, the world's only AI-Assisted Mineral Discovery Platform, will support the Company in identifying, ranking, and validating targets using artificial intelligence. Viz, VRIFY's dynamic 3D visualization tool, will transform stakeholder engagement and elevate the clarity of technical storytelling. "Our team has always prioritized visual storytelling," said Quentin Mai, President & CEO of West Point Gold. "Partnering with VRIFY allows us to take our project presentations to the next level and more effectively showcase the potential of our Gold Chain Project to investors and stakeholders." With a robust drilling database, strong geophysical coverage, and a large, highly prospective land package anchored by the advancing Tyro target, West Point is well-positioned to benefit from DORA's ability to synthesize complex geological data into high-confidence exploration targets. The Company is looking to maximize the return on shareholder capital by focusing exploration efforts where the probability of success is highest. "We believe the use of VRIFY's AI-Assisted Mineral Discovery Platform, DORA, should help us define and prioritize the many step-out targets we have at Gold Chain," said Derek Macpherson, Executive Chairman of West Point Gold. "The use of AI will allow us to more efficiently take advantage of the extensive early-stage geologic work we have completed to date, hopefully accelerating our exploration process as we work to demonstrate Gold Chain's full potential." VRIFY CEO and Co-Founder, Steve de Jong, added, "West Point is a great example of the forward-thinking teams we're excited to partner with. They understand that leveraging AI and modern visualization isn't optional anymore, it's how the next generation of discoveries will be made." With mineral exploration entering a new era driven by artificial intelligence, West Point Gold's adoption of VRIFY reflects a broader strategic shift towards data-driven discovery, capital efficiency, and maximizing per-share value creation for shareholders. About West Point Gold Corp. West Point Gold Corp. (formerly Gold79 Mines Ltd.) is a publicly listed company focused on gold discovery and development at four prolific Walker Lane Trend projects covering Nevada and Arizona, USA. West Point Gold is focused on developing a maiden resource at its Gold Chain project in Arizona, while JV partner Kinross is advancing the Jefferson Canyon project in Nevada. About VRIFY VRIFY is redefining mineral exploration by putting the power of AI into the hands of geoscientists. DORA, VRIFY's AI-Assisted Mineral Discovery Platform, empowers technical teams to leverage the industry's largest proprietary exploration dataset and mineral-system-specific AI models to identify, rank, and validate high-potential targets faster, and with greater confidence. A high-growth software company trusted globally by over 170 mineral exploration and mining companies, VRIFY is shaping a new era of exploration and discovery. Learn more at: For further information regarding this press release, please contact: Aaron Paterson, Corporate Communications ManagerPhone: +1 (778) 358-6173Email: info@ Stay Connected with Us:LinkedIn: (Twitter): @westpointgoldUSFacebook: FORWARD-LOOKING STATEMENTS: Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events including, among others, assumptions about future prices of gold, silver, and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining government approvals and financing on time, obtaining renewals for existing licenses and permits and obtaining required licenses and permits, labour stability, stability in market conditions, availability of equipment, availability of drill rigs, and anticipated costs and expenditures. The Company cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Such factors include, among other things: risks and uncertainties relating to West Point Gold's ability to complete any payments or expenditures required under the Company's various option agreements for its projects; and other risks and uncertainties relating to the actual results of current exploration activities, the uncertainties related to resources estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; risks relating to grade and continuity of mineral deposits; the uncertainties involved in interpreting drill results and other exploration data; the potential for delays in exploration or development activities; uncertainty related to the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results may vary from those expected; statements about expected results of operations, royalties, cash flows, financial position may not be consistent with the Company's expectations due to accidents, equipment breakdowns, title and permitting matters, labour disputes or other unanticipated difficulties with or interruptions in operations, fluctuating metal prices, unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and regulatory restrictions, including environmental regulatory restrictions. The possibility that future exploration, development or mining results will not be consistent with adjacent properties and the Company's expectations; operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); metal price fluctuations; environmental and regulatory requirements; availability of permits, failure to convert estimated mineral resources to reserves; the inability to complete a feasibility study which recommends a production decision; the preliminary nature of metallurgical test results; fluctuating gold prices; possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, political risks, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks involved in the mineral exploration and development industry, and those risks set out in the filings on SEDAR+ made by the Company with securities regulators. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this corporate press release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. To view the source version of this press release, please visit
Yahoo
14 minutes ago
- Yahoo
Telecommunications firm BCE swings to Q2 profit, also sees operating revenue increase
MONTREAL — BCE Inc. says its latest quarter delivered a higher profit and revenue than the telecommunications firm saw a year earlier. The parent company of Bell Canada says its second-quarter net earnings attributable to common shareholders amounted to $579 million or 63 cents per share. The result compared with a profit of $537 million or 59 cents per share a year prior. Operating revenue for the quarter ended June 30 totalled $6.08 billion compared with about $6 billion a year earlier. On an adjusted basis, BCE says it earned 63 cents per share, down from an adjusted profit of 78 cents per share a year earlier. Analysts on average had expected an adjusted profit of 71 cents per share, according to estimates compiled by LSEG Data & Analytics. This report by The Canadian Press was first published Aug. 7, 2025. Companies in this story: (TSX:BCE) The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
