HNST Stock Plunges: What Is Going On With The Honest Company?

The Honest Company (NASDAQ:HNST) stock is falling hard on Friday and it’s all thanks to the consumer goods company’s earnings report for the fourth quarter of 2021.

Image of a pen resting on a paper that reads "financial results" representing HNST Stock.

Source: Shutterstock

The Honest Company failed to meet expectations for the quarter with its diluted earnings per share of -10 cents. That’s still off from the -7 cents per share Wall Street was looking for, even if it’s better than the -37 cents reported in Q4 2020.

Not helping matters for HNST stock today is the company’s revenue of $80.38 million for Q4 2021. That’s a miss next to Wall Street’s estimate of $83.97. That’s due to it only being a 3% gain from the $77.87 million reported in Q4 2021.

Adding salt to the wound is The Honest Company’s outlook for 2022. For the full year, the company expects revenue growth to be flat compared to the $318.64 million in 2021. That means investors can expect it to miss Wall Street’s 2022 revenue estimate of $366.79 million.

So what’s behind that flat revenue growth estimate for 2022? The Honest Company is expecting revenue for the first quarter of the year to come in 15% lower than what was reported in Q1 2021. It’s looking for mid-single-digit growth in the three following quarters.

The poor earnings report from The Honest Company brings with its heavy trading of HNST stock. As of this writing, more than 14 million shares of the stock have changed hands. That’s well above its daily average trading volume of 1.4 million shares.

HNST stock is down 29.2% as of Friday morning and is down 47.3% since the start of the year.

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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