Shareholders will be ecstatic, with their stake up 54% over the past week following The Honest Company, Inc.'s (NASDAQ:HNST) latest quarterly results. Revenues of US$99m beat analyst forecasts by6.9%, while the business broke even in terms of statutory earnings per share (EPS). 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

After the latest results, the eight analysts covering Honest Company are now predicting revenues of US$396.6m in 2025. If met, this would reflect a reasonable 7.5% improvement in revenue compared to the last 12 months. Honest Company is also expected to turn profitable, with statutory earnings 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.

It will come as no surprise to learn that the analysts have increased their price target for Honest Company 27% to US$6.86on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.8% annually. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Honest Company going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Honest Company that we have uncovered.

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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.