The financial results for the three and nine months ended September 30, 2023, of Honest Company Inc. (NASDAQ: HNST) indicate a 2% increase in revenue to $86 Million. This was primarily driven by strong retail consumption, growth in the digital channel, baby clothing performance, and price hikes. However, the company had to abandon low-margin items in the club channel.
The 3 Pillars of Focus From the Management
According to Carla Vernón, CEO of Honest Company Inc., the transformation Initiative that they launched at the beginning of the year is still supporting their strong performance. The initiative revolves around three pillars which include Brand maximization, margin enhancement, and operating discipline, which were noticeable in their Q3 results. The company’s revenue hit an all-time high in the third quarter, and it achieved its highest gross margin in the last two years.
This leads to another quarter of positive operating cash flow. The results demonstrate the power of the Honest brand and its commitment to enhancing shareholder value. Moreover, the digital revenue grew by 19%, supported by double-digit growth at their key digital customer. However, the adjusted EBITDA for Q3 2023 was negative $1 Million.
Initiatives for Shareholder’s Wealth
The company’s pricing and cost savings initiatives, as well as disciplined portfolio management, are providing them with positive momentum as they approach the end of the fiscal year. The company is eager to share its long-term strategy update with its stakeholders in the coming Spring.
Technical Analysis and Prediction of HNST Stock Price
At the press time, the HNST stock price has broken above the current downtrend. The bears are still to be seen after a released of positive earnings report. The support level of $1.09 has been regained by bullish investors, and the next immediate resistance is at $1.93. The 50-day EMA and the 150-day EMA are located at $1.28 and $1.61, respectively.
As of now, the HNST stock price prediction seems bearish until it hits its immediate support. Once the support level is reached, the bears might take over, since the trend will be broken. If the HNST stock price breaks the immediate support, its next support level would be $0.7.
Conclusion
Honest Company Inc. (NASDAQ: HNST) reported its earnings report for the 3rd Quarter of 2024. The major focus of the company in this quarter has been on brand maximization, margin enhancement, and operating discipline. The HNST stock price surged after this release.
Technical Levels
Support Levels: $1.09 and $0.7
Resistance Levels: $1.93 and $2.45
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets or stocks comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/11/11/hnst-stock-bulls-surged-23-earning-report-on-drivers-seat/