Rocketing to a price of $3.15 during today's afternoon trading session, shares of The Honest Company are still -28.73% below their average target price of $4.42. Could there be more upside potential for the stock? Analysts are giving HNST an average rating of hold and target prices ranging from $3 to $8 dollars per share.
To understand the market's outlook on the stock, we can look at The Honest Company's short interest: the proportion of the share float that is tied to short positions. Behind each short position is an investor who believes that the stock will decline in the future. Here, the stock's short interest is 5.5% which means the outlook is split.
Another way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of The Honest Company, institutional investors own 58.9% of the shares. This would indicate a positive sentiment towards the stock among institutions. What does this really tell us?
In conclusion, we see mixed market sentiment regarding The Honest Company because of an analyst consensus of strong upside potential, a hold rating, an average amount of shares sold short, and an average number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about HNST:
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The stock has trailing 12 month earnings per share (Eps) of $-0.6
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The Honest Company has a trailing 12 month Price to Earnings (P/E) ratio of -5.3 compared to the S&P 500 average of 15.97
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The company has a Price to Book (P/B) ratio of 1.6 in contrast to the S&P 500's average ratio of 2.95
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The Honest Company is a Consumer Cyclical company, and the sector average P/E and P/B ratios are 24.11 and 3.11 respectively
