The investors in The Honest Company, Inc.'s (NASDAQ:HNST) will be rubbing their hands together with glee today, after the share price leapt 54% to US$6.50 in the week following its quarterly results. Revenues beat expectations, coming in 6.9% ahead of forecasts, and the company broke even on a statutory earnings per share (EPS) level. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Honest Company

Taking into account the latest results, the most recent consensus for Honest Company from eight analysts is for revenues of US$396.6m in 2025. If met, it would imply an okay 7.5% increase on its revenue over the past 12 months. Earnings are expected to improve, with Honest Company forecast to report a statutory profit of US$0.023 per share. Before this latest report, the consensus had been expecting revenues of US$386.7m and US$0.021 per share in losses. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the modest lift to revenue expectations.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 27% to US$6.86per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Honest Company analyst has a price target of US$8.00 per share, while the most pessimistic values it at US$5.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Honest Company shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Honest Company'shistorical trends, as the 6.0% annualised revenue growth to the end of 2025 is roughly in line with the 6.1% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.8% per year. So although Honest Company is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts now expect Honest Company to become profitable next year, compared to previous expectations that it would report a loss. They also upgraded their revenue forecasts, although the latest estimates suggest that Honest Company will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Honest Company going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Honest Company .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.