The security is brushing off a price-target cut from J.P. Morgan Securities
The shares of Honest Company Inc (NASDAQ:HNST) are surging today, last seen up 12.3% at $9.99, after the company reported a third-quarter revenue beat, while quarterly losses were in line with analysts' estimates. The brand of eco-friendly baby, beauty and household products saw sales of diapers and wipes grow 16%, while sales of skin and personal care items jumped 28%.
Despite the results, J.P. Morgan Securities cut the equity's target price to $12 from $13 earlier. Analysts are optimistic towards Honest stock, though, with seven of the nine in coverage calling it a "strong buy," while the remaining two carry a tepid "hold" rating. Plus, the equity's 12-month consensus target price of $13.69 is a significant 37.8% premium to current levels.
Meanwhile, short sellers have been piling on the security, leaving it ripe for a short squeeze. Short interest rose 23.6% over the last two reporting periods, and the 8.79 million shares sold short make up a whopping 12.3% of the stock's available float, or more than a week's worth of pent-up buying power.
Honest stock is now eyeing its second close at or above the 60-day moving average since the trendline first came into place in late July. The equity had been middling around the $9 mark over the last few weeks, after nearly halving from its initial public offering (IPO) price of $16. HNST has shed 33.5% in the last six months.
Options traders have been quick to jump in on the action. So far, 2,882 calls and 2,166 puts have been exchanged, which is four times what is typically seen at this point. Most popular is the November 10 call, followed by the 10 put in that same monthly series.