What Happened?
Shares of personal care company The Honest Company (NASDAQ: HNST) jumped 10.9% in the afternoon session after the company's stock rose in tandem with a broad market rally as the head of the U.S. Federal Reserve signaled that interest rate cuts may be forthcoming. The broader market experienced a significant surge, with the Dow Jones Industrial Average soaring over 900 points, following comments from Federal Reserve Chair Jerome Powell that hinted at potential cuts to interest rates. This signal of a possible easing in monetary policy sent a wave of optimism through Wall Street, lifting many stocks along with the major indices. There was no significant positive news specific to The Honest Company to account for the sharp increase in its share price.
Is now the time to buy The Honest Company? Access our full analysis report here, it’s free.
What Is The Market Telling Us
The Honest Company’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. But moves this big are rare even for The Honest Company and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 32.3% on the news that the company reported strong third-quarter results that blew past analysts' revenue, EBITDA, and EPS expectations. The improved sales and profitability were mostly driven by strong performance in baby and personal care products and successful sales events like Amazon Prime Day and limited-edition retail promotions at Walmart and Target. Looking ahead, full-year EBITDA guidance also outperformed Wall Street's estimates. However, the company is keeping a close watch on potential risks like the impact of tariffs on its Chinese-sourced wipes. Zooming out, this was a strong quarter for the company, showing that the business is staying on track.
The Honest Company is down 39.8% since the beginning of the year, and at $4.09 per share, it is trading 52.3% below its 52-week high of $8.57 from November 2024. Investors who bought $1,000 worth of The Honest Company’s shares at the IPO in May 2021 would now be looking at an investment worth $177.61.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
