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

As of 17 October 2025, the valuation grade for The Honest Co., Inc. has moved from attractive to expensive, indicating a shift in perception regarding its market value. The company appears to be overvalued based on its current metrics, particularly with a P/E ratio of 48, an EV to EBITDA of 32.05, and a Price to Book Value of 3.15. These ratios suggest that the stock is trading at a significant premium compared to its earnings and book value.
In comparison to peers, The Honest Co., Inc. has a P/E ratio of 23.51, which is notably higher than Envela Corp.'s 23.22 and PetMed Express, Inc.'s 58.87, indicating that it is priced less favorably relative to its earnings potential. Furthermore, the company's recent performance has lagged behind the S&P 500, with a year-to-date return of -47.47% compared to the index's 13.30%, reinforcing the notion that the stock may not be a compelling investment at its current valuation.