We assign a fundamental rating of 4 out of 10 to HNST. HNST was compared to 36 industry peers in the Personal Care Products industry. No worries on liquidiy or solvency for HNST as it has an excellent financial health rating, but there are worries on the profitability. While showing a medium growth rate, HNST is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year HNST was profitable.
In the past year HNST has reported a negative cash flow from operations.
In the past 5 years HNST always reported negative net income.
In multiple years HNST reported negative operating cash flow during the last 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 2.93%, HNST is in line with its industry, outperforming 58.33% of the companies in the same industry.
With a decent Return On Equity value of 3.72%, HNST is doing good in the industry, outperforming 66.67% of the companies in the same industry.
HNST has a Return On Invested Capital (1.88%) which is in line with its industry peers.

		Industry Rank	Sector Rank
ROA	2.93%
ROE	3.72%
ROIC	1.88%

ROA(3y)-14.1%

ROA(5y)-11.89%

ROE(3y)-22.95%

ROE(5y)-19.23%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 1.85%, HNST is in line with its industry, outperforming 55.56% of the companies in the same industry.
Looking at the Operating Margin, with a value of 1.22%, HNST is in line with its industry, outperforming 47.22% of the companies in the same industry.
The Gross Margin of HNST (38.81%) is worse than 72.22% of its industry peers.
HNST's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	1.22%
PM (TTM)	1.85%
GM	38.81%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y3.71%

GM growth 5Y3.49%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

HNST has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, HNST has more shares outstanding
The number of shares outstanding for HNST has been increased compared to 5 years ago.
There is no outstanding debt for HNST. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

HNST has an Altman-Z score of 2.92. This is not the best score and indicates that HNST is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.92, HNST is doing good in the industry, outperforming 61.11% of the companies in the same industry.
HNST has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	N/A
Altman-Z	2.92

ROIC/WACC0.21

WACC8.9%

2.3 Liquidity

A Current Ratio of 4.82 indicates that HNST has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.82, HNST belongs to the top of the industry, outperforming 86.11% of the companies in the same industry.
HNST has a Quick Ratio of 2.73. This indicates that HNST is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.73, HNST is doing good in the industry, outperforming 75.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	4.82
Quick Ratio	2.73

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 250.00% over the past year.
Looking at the last year, HNST shows a small growth in Revenue. The Revenue has grown by 3.89% in the last year.
Measured over the past years, HNST shows a quite strong growth in Revenue. The Revenue has been growing by 9.94% on average per year.

EPS 1Y (TTM)250%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%318.75%

Revenue 1Y (TTM)3.89%

Revenue growth 3Y5.9%

Revenue growth 5Y9.94%

Sales Q2Q%-6.72%

3.2 Future

HNST is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 66.09% yearly.
Based on estimates for the next years, HNST will show a small growth in Revenue. The Revenue will grow by 5.89% on average per year.

EPS Next Y173.1%

EPS Next 2Y71.81%

EPS Next 3Y45.89%

EPS Next 5Y66.09%

Revenue Next Year-0.93%

Revenue Next 2Y-5.1%

Revenue Next 3Y-1.13%

Revenue Next 5Y5.89%

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 41.17, which means the current valuation is very expensive for HNST.
The rest of the industry has a similar Price/Earnings ratio as HNST.
HNST is valuated rather expensively when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 43.24, the valuation of HNST can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HNST is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, HNST is valued quite expensively.

		Industry Rank	Sector Rank
PE	41.17
Fwd PE	43.24

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HNST is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	26.59

4.3 Compensation for Growth

HNST's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as HNST's earnings are expected to grow with 45.89% in the coming years.