School Specialty (OTCMKTS:SCOO) & Honest (NASDAQ:HNST) Financial Analysis

Honest (NASDAQ:HNST) and School Specialty (OTCMKTS:SCOO) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Honest	1.85%	3.86%	2.82%
School Specialty	N/A	N/A	N/A

Institutional & Insider Ownership

45.5% of Honest shares are held by institutional investors. 8.9% of Honest shares are held by insiders. Comparatively, 41.0% of School Specialty shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Honest and School Specialty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$378.34 million	0.82	-$6.12 million	$0.06	46.50
School Specialty	N/A	N/A	N/A	N/A	N/A

School Specialty has lower revenue, but higher earnings than Honest.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Honest and School Specialty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	1	4	1	0	2.00
School Specialty	0	0	0	0	0.00

Honest presently has a consensus price target of $3.00, suggesting a potential upside of 7.53%. Given Honest’s stronger consensus rating and higher probable upside, equities analysts clearly believe Honest is more favorable than School Specialty.

Summary

Honest beats School Specialty on 8 of the 9 factors compared between the two stocks.

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.

About School Specialty

School Specialty, Inc., together with its subsidiaries, provides supplies, furniture, technology products, and curriculum solutions to the education marketplace in the United States and Canada. The company’s Distribution segment offers office products, classroom supplies, janitorial and sanitation supplies, school equipment, school and student safety and security products and services, physical education products, art supplies and paper, and others; physical education programs, solutions, resources, and equipment to improve student and staff wellness; and science education products, supplemental curriculum, and lab equipment and supplies. It also provides supplemental learning materials, teaching resources, classroom libraries, and manipulatives; intervention products; educator-inspired quality audio technology products, including multi-media, audio visual, and presentation equipment for the PreK-12 education market; and school-specific furniture and equipment for in-school, in-classroom, and outdoor use, as well as project management and design services for school refurbishment and new construction projects. This segment offers its products under the Childcraft, Sax Arts & Crafts, Califone, Classroom Select, Sportime, Abilitations, Hammond & Stephens, Brodhead Garrett, School Smart, Royal Seating, Projects by Design, CPO Science, Frey Scientific, Educator’s Publishing Service, Wordly Wise 3000, Explode the Code, ThinkMath!, SSI Guardian, Making Connections, S.P.I.R.E, Buckle Down, and Coach brands. Its Curriculum segment develops and sells standards-based curriculum science products, such as laboratory supplies and equipment, and furniture under the FOSS, Frey Scientific, Delta Science Module, Delta Education, CPO Science, and Neo/SCI brand names. The company offers its products through its sales force, catalogs, and its proprietary e-commerce Websites. School Specialty, Inc. was founded in 1959 and is headquartered in Greenville, Wisconsin.