Critical Analysis: Beyond (NYSE:BYON) & Honest (NASDAQ:HNST)

Beyond (NYSE:BYON) and Honest (NASDAQ:HNST) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Valuation & Earnings

This table compares Beyond and Honest’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beyond	$1.56 billion	0.65	-$307.84 million	($6.80)	-3.28
Honest	$344.36 million	0.80	-$39.24 million	($0.42)	-6.79

Honest has lower revenue, but higher earnings than Beyond. Honest is trading at a lower price-to-earnings ratio than Beyond, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Beyond has a beta of 3.92, indicating that its share price is 292% more volatile than the S&P 500. Comparatively, Honest has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Beyond and Honest, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beyond	0	2	4	0	2.67
Honest	0	3	2	0	2.40

Beyond currently has a consensus target price of $39.00, indicating a potential upside of 75.04%. Honest has a consensus target price of $4.55, indicating a potential upside of 59.65%. Given Beyond’s stronger consensus rating and higher probable upside, analysts plainly believe Beyond is more favorable than Honest.

Profitability

This table compares Beyond and Honest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Beyond	-19.72%	-16.92%	-11.38%
Honest	-11.39%	-30.36%	-18.86%

Institutional & Insider Ownership

76.3% of Beyond shares are owned by institutional investors. Comparatively, 45.5% of Honest shares are owned by institutional investors. 1.2% of Beyond shares are owned by insiders. Comparatively, 8.6% of Honest shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Beyond beats Honest on 8 of the 13 factors compared between the two stocks.

About Beyond

Beyond, Inc. operates as an online retailer of furniture and home furnishings products in the United States and Canada. The company offers furniture, bedding and bath, patio and outdoor gear, area rugs, tabletop and cookware, décor, storage and organization, small appliances, home improvement, and other products under the Bed Bath & Beyond brand. The company provides its products and services through its e-commerce platform accessible through its mobile application, which includes bedbathandbeyond.com, bedbathandbeyond.ca, and overstockgovernment.com. It also offers businesses advertising products or services on its website; Marketplace, a service that allows its partners to sell their products through third party sites; product sales to international customers using third party logistics providers; and Supplier Oasis, a singular integration point that enables partners to manage their products, inventory, and sales channels, as well as access multi-channel fulfillment services through its distribution network. The company was formerly known as Overstock.com, Inc. and changed its name to Beyond, Inc. in November 2023. Beyond, Inc. was founded in 1997 and is headquartered in Midvale, Utah.

About Honest

The Honest Company, Inc. manufactures and sells diapers and wipes, skin and personal care, and household and wellness products. The company also offers baby clothing and nursery bedding products. It sells its products through digital and retail sales channels, such as its website and third-party ecommerce sites, as well as brick and mortar retailers. The company was incorporated in 2012 and is headquartered in Los Angeles, California.