Star power fuels this new issue

Article Excerpt

HONEST CO. INC. $16 is a hold. The company (Nasdaq symbol HNST; Consumer sector; Shares outstanding: 90.2 million; Market cap: $1.4 billion; No dividend paid; Takeover Target Rating: Lowest; www.honest.com) sells a variety of baby products, bath items and skin lotions made from natural ingredients. It has banned the use of over 2,500 chemicals, and does not test its products on animals. Actress Jessica Alba co-founded the company in 2012 and still owns 6%. On May 7, 2021, the company completed its IPO of 6.45 million shares at $16 a share. Insiders also sold 25.81 million shares. The stock jumped to $23.88 on the first day, but has moved back down to its IPO price. Honest Co.’s revenue in 2020 totalled $300.5 million, up from $235.6 million in 2019. The company had a net loss for the year of $14.5 million. In 2020, 55% of its revenue came from online channels, while regular stores contributed 45%. The company’s connection with celebrity…