Should You Buy Honest Company Inc (HNST) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Hold
Latest Price
2.440
1 Day change
0.41%
52 Week Range
6.800
Analysis Updated At
2026/01/29
HNST is not a good buy right now for a beginner long-term investor who is impatient. The chart trend is still bearish (moving averages stacked down and MACD weakening), Wall Street sentiment has recently deteriorated with multiple downgrades and sharp price-target cuts, and the latest quarter showed declining revenue and margin pressure. While the stock looks short-term oversold and options positioning is very call-heavy (bullish), that’s not enough to outweigh the current downtrend and weak growth visibility. Best action: hold/avoid new buying at this time.
Technical Analysis
Price is $2.444 (closed), down -2.80% on the regular session. Trend is bearish: SMA_200 > SMA_20 > SMA_5 indicates a sustained downtrend. MACD histogram (-0.00196) is below zero and negatively expanding, suggesting bearish momentum is strengthening rather than stabilizing. RSI_6 at ~29.4 signals oversold/washed-out conditions (potential for a bounce), but oversold alone is not a confirmed reversal signal given the bearish MA stack and MACD. Key levels: immediate support S1 ~2.435 (very close) then S2 ~2.386; pivot ~2.516 is the first level that would need to be reclaimed to improve the near-term tone; resistance R1 ~2.596 then R2 ~2.645. Pattern-based forward odds provided: ~60% chance of -0.28% next day, +1.73% next week, and -1.16% next month—suggesting any bounce risk is counter-trend and not clearly durable.
Options Data
Bullish
Open Interest Put-Call Ratio
Bullish
Option Volume Put-Call Ratio
Options sentiment is notably bullish/“call-skewed”: open interest put/call is 0.08 (calls vastly outweigh puts), and volume put/call is 0.16 (more calls than puts today). Today’s total option volume is 2,784 vs 30-day average activity at ~60.9% (not an unusually crowded day). Implied volatility is elevated (30D IV ~74.5) but below historical volatility (~120.6), with IV percentile ~43.6 and IV rank ~16.6—options are not extremely expensive versus the past year. Net read: traders are positioned more for upside/relief rallies than for downside hedging, but this is occurring inside a still-bearish price trend.
Technical Summary
Sell
9
Buy
1
Positive Catalysts
Short-term oversold setup (RSI ~29) can support a reflex bounce, especially with call-heavy options sentiment. Transformation/“productivity program” and exiting lower-margin categories could help margins longer-term if execution is strong. Net income turned positive YoY in the latest quarter (though on lower revenue).
Neutral/Negative Catalysts
Downtrend remains intact (bearish moving averages + worsening MACD), making immediate buying higher-risk for an impatient investor. Competitive pressure in diapers cited by JPMorgan implies sustained promotions and margin pressure. Multiple analyst downgrades/price target cuts (recently) indicate reduced confidence and low visibility. Latest quarter showed revenue decline and gross margin contraction, weakening the long-term compounding story. No positive news catalysts reported in the past week. No notable hedge fund/insider accumulation signal in the provided data.
Financial Performance
Latest reported quarter: 2025/Q3. Revenue fell to $92.57M (-6.72% YoY), indicating shrinking top-line momentum. Gross margin decreased to 37.26% (-3.70% YoY), consistent with promotion/competitive pressure. Net income improved to $0.758M (+359.39% YoY) and EPS was $0.01, showing progress toward profitability—but profitability improved while sales and margins weakened, which is not the ideal long-term growth pattern for a beginner-focused long-term buy.
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
Recent trend is clearly negative: (1) JPMorgan double-downgraded to Underweight from Overweight (2026-01-16) citing competitive diaper pressure and increased promotions; no PT given. (2) Morgan Stanley cut PT to $3 from $4.25 and stayed Equal Weight (2025-11-19) citing weak Q3 and lower guidance/low visibility. (3) Lake Street downgraded to Hold from Buy, PT cut to $3 from $7 (2025-11-06). (4) Multiple firms cut PTs sharply on/after the Q3 report, even when maintaining Buy ratings (e.g., Alliance Global Partners and B. Riley). Wall Street pros view: brand/category can be attractive and restructuring may improve profitability longer-term. Wall Street cons view: near-term results are pressured, visibility is low, competition is intense, and shares may remain range-bound until consistent organic growth and margin improvement show up. Politicians/congress: no recent congress trading data available; no politician activity provided.
Wall Street analysts forecast HNST stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HNST is 3.83 USD with a low forecast of 3 USD and a high forecast of 6 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
Wall Street analysts forecast HNST stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HNST is 3.83 USD with a low forecast of 3 USD and a high forecast of 6 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Buy
3 Hold
0 Sell
Moderate Buy
Current: 2.430
Low
3
Averages
3.83
High
6
Current: 2.430
Low
3
Averages
3.83
High
6
JPMorgan
Andrea Teixeira
Overweight -> Underweight
downgrade
AI Analysis
2026-01-16
Reason
JPMorgan
Andrea Teixeira
Price Target
AI Analysis
2026-01-16
downgrade
Overweight -> Underweight
Reason
JPMorgan analyst Andrea Teixeira double downgraded Honest Company to Underweight from Overweight without a price target. The firm adjusted ratings in the beverage, household and personal care products group as part of its Q4 earnings preview. Honest Company faces heightened competitive pressure on diapers, which requiem increased promotions, the analyst tells investors in a research note. JPMorgan adds that the company recently announced a productivity program that includes exiting lower margin, non-strategic categories.
Morgan Stanley
Equal Weight
downgrade
$3
2025-11-19
Reason
Morgan Stanley
Price Target
$3
2025-11-19
downgrade
Equal Weight
Reason
Morgan Stanley lowered the firm's price target on Honest Company to $3 from $4.25 and keeps an Equal Weight rating on the shares. Given a weaker than expected Q3, lower fiscal year guidance and the announcement of Transformation 2.0, visibility remains low at Honest, the analyst tells investors.
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