Honest Co. investors have had enough, analysts say, after a second-quarter earnings miss drove down the stock, which has already seen a 37.3% decline over the past three months.

The benchmark S&P 500 index

has gained 7% during the period.

Shares began trading on May 5. The stock was down 1% on Monday after plunging more than 28% on Friday.

The clean beauty and diaper company founded by actress and entrepreneur Jessica Alba reported a wider-than-expected loss and missed revenue expectations for the three months ending June 30.

One of the challenges for the quarter was a $6 million headwind, which the company said was due to a “reduction of inventory on-hand by a key digital partner who cut inventory in consumables in the second quarter to free up space for other products ahead of a major promotional event.”

Amazon.com Inc.

hosted its annual Prime Day event on June 21 and June 22. Other retailers like Walmart Inc.

and Target Corp.

also hosted events that overlapped with Prime Day.

See: Honest Co. CEO ready to face big-name competition like P&G and Revlon with ‘clean’ brand strength

Honest said skin and personal care revenue rose 16% during the quarter, but diapers and wipes were down 2% and household and wellness items were down 6%.

“We are struggling to defend this stock & story as visibility remains clouded,” wrote Jefferies analysts in a note.

Analysts called the mixed messaging a “letdown.” Jefferies maintained its buy stock rating but lowered its price target to $14 from $19.

“The stock reaction is fair – reflecting downside to the model and unsurprising ‘I’m out’ investor sentiment.”

Bank of America maintained its neutral stock rating but cut its price target to $11 from $18.

‘A number of key disruptions affected sales this quarter, including a $3.7 million COVID benefit to wipes in the year-ago quarter and a $6.4 million destocking around Prime Day at Amazon,” analysts wrote.

“With the beauty restage still on track for Q3 and more innovation to follow this year’s successful diaper entry, what remains to be seen is how Honest will rebuild its health & wellness innovation pipeline, complicating a return to +15% top-line growth now that COVID categories have shown to be less sticky.”

J.P. Morgan thinks the stock declines are “overdone,” which creates “a buying opportunity for investors with a ~6-12 month minimum investment horizon.”

J.P. Morgan rates Honest Co. shares overweight with a $13 price target, down from $19.

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“We were able to speak one-on-one with CEO Nick Vlahos and CFO Kelly Kennedy following [the] earnings conference call, and management reassured (as they did on the earnings call) that its key divisions (Diapers and Wipes and Skin & Personal Care—together represent ~89% of sales) are tracking as planned to deliver double-digit growth in 2021 compared to 2020 despite the tough comparisons,” analysts said.

“While we believe the Honest Co. story will now require a bit more patience than what we had initially thought, we remain positive on shares, particularly at current levels.”

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