Is The Honest Co., Inc. overvalued or undervalued?

As of 6 August 2025, the valuation grade for The Honest Co., Inc. has moved from risky to expensive, indicating a shift towards a more negative outlook. The company appears to be overvalued based on its current metrics, with a P/E ratio of 48, a Price to Book Value of 3.15, and an EV to EBITDA of 32.05. In comparison to peers, The Honest Co., Inc. has a higher P/E ratio than Envela Corp. at 23.22 and PetMed Express, Inc. at 58.87, both of which are in more favorable valuation positions.
The company's recent stock performance shows a mixed picture; while it outperformed the S&P 500 over the past week and month, with returns of 2.53% and 4.11% respectively, it has significantly underperformed year-to-date with a decline of 41.56% compared to the S&P 500's gain of 12.22%. This underperformance reinforces the notion that The Honest Co., Inc. is currently overvalued in the market.