The Honest Company, Inc. — Earnings Quality Grade F
HNST · Consumer Defensive
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 33 days, change -9 days YoY
AR growth -22.3% vs revenue growth -1.9%
Revenue -1.9%, CFFO 881.2%. Cash follows revenue
Expense Quality
Inventory -15.0% vs COGS 5.9%. Normal
CapEx growth 184.9% is >2x revenue growth -1.9%
SG&A/Gross Profit = 105.6%, exceeds 70%
Gross margin 33.3%, change -4.9pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF $0.0B, FCF/NI = -0.87
Accruals ratio = -13.7%. Low accruals
Cash $0.1B covers debt $0.0B
Balance Sheet Health
Goodwill+Intangibles $0.0B = 1% of equity. Manageable
Debt/EBITDA = -2.9x. Healthy
Other assets -27.9% vs revenue -1.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -1% YoY. Normal
Manipulation Score
M-Score = -3.27 (< -2.22). Unlikely manipulator
Portfolio monitoring
Monitor HNST continuously
The full checks and model details are free to read. Use Watchlist to track your holdings; Pro adds automatic quarterly rescoring, risk-event email alerts, scans up to 50 tickers, and export workflows.
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25