NEW YORK, August 6, 2026, 15:07 EDT
- The share price climbed 39.7% to a late $5.38. Trading volume was 13.5 times above the average of the previous three sessions.
- Wipes and personal care made up 72.0% of revenue for the quarter, an increase from 53.0% in the same quarter last year.
- On Thursday, four out of five price targets were set below the market price, which was reported with a delay.
The Honest Company, Inc. NASDAQ:HNST jumped 39.7% to $5.38 in the most recent delayed quote on Thursday. The company saw faster organic growth, and executives boosted their 2026 forecast. Nasdaq trading continued at the time of publication.
Trading activity surged, with volume hitting 17.8 million shares—roughly 13.5 times higher than the average of the past three sessions.
A clearer indicator appears in the product mix. Wipes and personal care accounted for 72.0% of revenue in the second quarter, up from a combined 53.0% the previous year.
| Q2 revenue distribution | 2026 revenue ($m) | Year-on-year change | 2026 share | 2025 share |
|---|---|---|---|---|
| Wipes | 39.5 | +37.3% | 47.4% | 30.8% |
| Personal care and other | 20.5 | -1.1% | 24.6% | 22.2% |
| Diapers | 20.2 | -21.2% | 24.2% | 27.4% |
| Honest.com, apparel and Canada | 3.1 | -83.0% | 3.7% | 19.6% |
| Total | 83.3 | -10.9% | 100.0% | 100.0% |
Revenue from wipes increased by 37.3%, but diapers dropped 21.2%. The Honest.com, apparel, and Canada segment contracted by $15.2 million—more than the overall revenue decrease of $10.2 million. Other categories together grew by a net $5.1 million.
Revenue declined 10.9% as portfolio exits offset core growth. Organic revenue increased 6.7%. Underlying adjusted gross margin improved by 340 basis points.
| Q2 metric | 2026 | 2025 | Change |
|---|---|---|---|
| Reported revenue | $83.3m | $93.5m | -10.9% |
| Organic revenue | $80.2m | $75.1m | +6.7% |
| Gross margin | 48.4% | 40.4% | +800 bps |
| Underlying adjusted gross margin | 43.8% | 40.4% | +340 bps |
| Net income | $10.7m | $3.9m | +$6.8m |
| Underlying adjusted EBITDA | $7.8m | $7.6m | +$0.2m |
Chief Executive Carla Vernón stated, “For the second quarter we delivered accelerated Organic Revenue growth of 7% and record underlying margins.” Tracked-channel consumption increased by 7.7%, compared to 2.3% for comparison categories. The Honest Company, Inc.
The headline margin requires a link. Adjusted gross margin stood at 50.1%. Stripping out tariff refunds and apparel liquidation, the figure was 43.8%. The underlying performance maintained robust growth.
Chief Financial Officer Curtiss Bruce stated, “To understand our true underlying profitability, it is important to exclude the one-time tariff refund and apparel liquidation.” Honest recorded $6.6 million in tariff refunds within cost of revenue.
Following that change, management raised its primary outlook. The midpoint for adjusted EBITDA climbed 11.6%, while the midpoint for reported revenue advanced 4.2%.
| Full-year 2026 outlook | Updated | Prior | Midpoint change |
|---|---|---|---|
| Reported revenue | $319m–$325m | $306m–$312m | +4.2% |
| Organic revenue growth | 5%–7% | 4%–6% | +1 percentage point |
| Adjusted gross margin | Mid-40s | Low-40s | Higher |
| Adjusted EBITDA | $23m–$25m | $20m–$23m | +11.6% |
The updated revenue forecast accounts for approximately $10 million in apparel liquidation. However, guidance for organic growth was also raised. This distinguishes the improvement in core performance from portfolio restructuring efforts.
The balance sheet allows management flexibility. The company reported cash holdings of $105.9 million and carried no debt. Operating cash flow for the first half totaled $37.8 million. Honest additionally bought back 5.6 million shares for $18.7 million, averaging $3.35 per share.
Working capital conditions could worsen in the near term. Management anticipates that a portion of the earlier inventory timing advantage will unwind in the second half.
Initial calculations in the article estimate enterprise value at close to $471.3 million, based on the delayed $5.38 share price, the basic share count as of July 31, and cash at the end of the quarter. This is roughly 19.6 times the midpoint of the company’s adjusted EBITDA outlook.
| Preliminary valuation calculations | Amount |
|---|---|
| Most recent share price | $5.38 |
| Total basic shares | 107.3m |
| Total basic equity | $577.2m |
| Total cash | $105.9m |
| Total debt | $0 |
| Calculated enterprise value | $471.3m |
| Estimated adjusted EBITDA for 2026 (midpoint) | $24.0m |
| EV to adjusted EBITDA ratio | 19.6 times |
| EV to revenue ratio | 1.46 times |
| Cash per share (basic) | $0.99 |
Analysts increased their target prices, yet the stock moved ahead of the majority of updates. As of August 6, four out of five targets remain at $5. New calls highlight the difference.
| Firm | August 6 action | Rating | Target | Gap versus $5.38 |
|---|---|---|---|---|
| Northland | Lifted from $5.00 | Outperform | $5.50 | +2.2% |
| Freedom Broker | Switched from Hold; target increased from $4.00 | Buy | $5.00 | -7.1% |
| Alliance Global | Lifted from $4.00 | Buy | $5.00 | -7.1% |
| B. Riley Securities | Lifted from $4.00 | Buy | $5.00 | -7.1% |
| Telsey Advisory | Lifted from $4.00 | Market Perform | $5.00 | -7.1% |
The broader consensus continues to be careful. MarketBeat lists two buy ratings, four holds, and two sells. The average price target of $4.38 is 18.6% under the delayed quote.
The shift appeared to be specific to certain companies. Shares of e.l.f. Beauty Inc. NYSE:ELF climbed 7.9%. Edgewell Personal Care Co. (NYSE:EPC) dropped 3.8%, and Kimberly-Clark Corp. NYSE:KMB slipped 3.3%.
Risks persist. Ongoing diaper distribution losses and lower prices are still weighing on both sales and margins. The status of further tariff refunds is still unclear. Part of the cash generated in the first half also resulted from inventory timing.
The rerating faces two main challenges. Wipes growth needs to continue, and core margins must stay intact. With a valuation close to 20 times projected EBITDA, successful execution is now more critical than the refund.
