Arhaus (ARHS) AI Stock Analysis

• Market Cap: $1.16B
• Dividend Yield: N/A
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 16.9
• Beta (1Y): 1.39
• Revenue Growth: -1.29%
• EPS Growth: -45.51%
• Country: US
• Employees: 2,390
• Sector: Consumer Cyclical
• Sector Strength: 62
• Industry: Home Improvement
• EPS (TTM): 0.49
• Shares Outstanding: 53,523,815
• 10 Day Avg. Volume: 1,186,073
• 30 Day Avg. Volume: 1,809,830
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 3.23
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.44
• Price Target Upside: 39.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Arhaus's solid revenue growth and cash flow management are promising; however, declining profitability and high leverage pose risks. The technical outlook is bearish, and the stock's valuation is moderate without dividends. The earnings call and CFO appointment offer cautious optimism amid macroeconomic challenges.

Positive Factors

Leadership

The recent executive appointments should help stabilize leadership, ease concerns over potential disruptions amid heavy investments in IT and operations, and help restore momentum.

Market Position

ARHS is well positioned in the high-end segment of the furniture market with a differentiated and high quality product offering which could lead to continued share growth.

Negative Factors

Demand Environment

Management expects first-quarter comps between a 6% decline and 1% growth, where the abnormally wide range underscores the exceedingly choppy demand environment.

Leadership Risks

Arhaus lost its CFO, COO, and SVP of IR in 2.5 months, which adds execution risk and impacts communication with the Street.

Profitability

The margin guide came in below expectations, suggesting potential challenges for the company's profitability.

Arhaus Business Overview & Revenue Model

Company Description

Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases and modular storage, etc.; and outdoor products include outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It also offers lighting products, such as various distinct and artistic lighting fixtures, including chandeliers, pendants, table and floor lamps, and sconces; textile products comprising handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, catalog, and in-home designer services. As of December 31, 2021, it operated through a network of 71 traditional showrooms, 5 Design Studios, and 3 Outlets, as well as 58 showrooms with in-home interior designers. The company was founded in 1986 and is headquartered in Boston Heights, Ohio.

How the Company Makes Money

Arhaus generates revenue primarily through the retail sale of home furnishings and decor. The company's key revenue streams include sales from its brick-and-mortar stores, e-commerce platform, and design services. Arhaus operates a network of showrooms across the United States, which serve as both retail spaces and design centers where customers can engage with design consultants. Additionally, their online platform expands their reach to a broader audience, providing an omnichannel shopping experience. Arhaus benefits from partnerships with artisans and manufacturers, which allow them to offer exclusive and unique products. The company's focus on sustainability and craftsmanship also appeals to a growing segment of consumers interested in environmentally responsible and high-quality home furnishings.

Arhaus Financial Statement Overview

Summary

Arhaus shows strong revenue growth and cash flow management, with effective cash generation from operations. However, declining profitability in 2024 and high leverage are concerns that could impact long-term stability.

Income Statement

Arhaus has demonstrated strong revenue growth over the years, with a notable increase from 2020 to 2023. The gross profit margin has been consistent, suggesting efficient cost management. However, there was a decline in EBIT and net income in 2024 compared to 2023, indicating potential challenges in maintaining profitability.

Balance Sheet

The company's debt-to-equity ratio has been on the higher side, reflecting significant leverage. However, stockholders' equity has grown, improving the equity ratio over the years. The return on equity is strong, indicating effective utilization of equity to generate profits. Nonetheless, the high debt level poses a risk if not managed properly.

Cash Flow

Arhaus exhibits robust operating cash flow, which has been consistently positive. Free cash flow has shown growth, albeit with fluctuations due to capital expenditures. The operating cash flow to net income ratio is healthy, suggesting good cash generation relative to net earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.27B	1.29B	1.23B	796.92M	507.43M
	Gross Profit
501.23M	540.42M	525.06M	329.93M	199.50M
	EBIT
87.00M	164.31M	184.67M	33.35M	31.16M
	EBITDA
87.00M	227.06M	238.62M	57.74M	48.12M
	Net Income Common Stockholders
68.55M	125.24M	136.63M	36.93M	17.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
197.51M	223.10M	145.18M	123.78M	50.74M
	Total Assets
1.21B	1.11B	931.79M	586.55M	315.94M
	Total Debt
499.50M	462.93M	381.98M	50.52M	47.60M
	Net Debt
301.99M	239.83M	236.80M	-73.25M	-3.14M
	Total Liabilities
862.57M	773.86M	722.10M	516.78M	352.04M
	Stockholders Equity
343.75M	340.24M	209.69M	69.77M	-36.09M
Cash Flow		Free Cash Flow
39.74M	75.24M	21.80M	98.37M	137.42M
	Operating Cash Flow
147.11M	172.30M	74.45M	146.24M	150.44M
	Investing Cash Flow
-99.53M	-96.72M	-52.66M	-47.87M	-13.01M
	Financing Cash Flow
-72.95M	-1.80M	-177.00K	-31.47M	-98.33M

Arhaus Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARHS, the sentiment is Neutral. The current price of 8.22 is above the 20-day moving average (MA) of 7.95, below the 50-day MA of 8.79, and below the 200-day MA of 10.72, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 48.93 is Neutral, neither overbought nor oversold. The STOCH value of 49.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARHS.

Arhaus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LZB	72 Outperform	$1.71B	14.16	12.40%	2.10%	1.81%	8.09%
ARHS	67 Neutral	$1.16B	16.87	20.04%	―	-1.29%	-45.51%
HVT	62 Neutral	$320.68M	16.53	6.97%	7.05%	-12.29%	-56.17%
HVT.A	62 Neutral	$320.68M	16.50	6.97%	6.09%	-12.29%	-57.17%
Sector *	61 Neutral	$6.66B	11.71	2.96%	4.01%	2.64%	-20.91%
MLKN	52 Neutral	$1.13B	39.37	2.28%	4.62%	-2.68%	-56.16%
TTSH	52 Neutral	$253.17M	106.59	1.91%	―	-7.97%	-77.05%

Arhaus Corporate Events

Arhaus Appoints Michael Lee as New CFO

On April 22, 2025, Arhaus, Inc. announced the appointment of Michael Lee as Chief Financial Officer, effective May 12, 2025. Michael Lee brings extensive experience from his previous roles at Ste. Michelle Wine Estates and Canopy Growth Corporation. His compensation package includes a base salary of $550,000, a sign-on bonus, and eligibility for incentive awards and stock units. This strategic appointment is expected to enhance Arhaus’s financial leadership and operational efficiency.

Spark’s Take on ARHS Stock

According to Spark, TipRanks’ AI Analyst, ARHS is a Neutral.

Arhaus demonstrates solid financial performance, particularly in revenue growth and cash management, but faces challenges with declining profitability and high leverage. Technical indicators suggest a bearish trend, while the valuation shows moderate pricing without dividends. The earnings call indicates cautious optimism with strong showroom expansion, but macroeconomic challenges persist.

To see Spark’s full report on ARHS stock, click here.

Arhaus Appoints New CIO Amid Leadership Changes

On April 7, 2025, Arhaus, Inc. announced the appointment of Allison Sutley as Chief Information Officer, effective April 14, 2025. Ms. Sutley brings extensive experience from her previous roles at Express, Inc., Cardinal Health, Inc., and Designer Brands Inc. This strategic appointment is expected to enhance Arhaus’s technological capabilities and operational efficiency. In connection with her new role, Ms. Sutley will receive a comprehensive compensation package, including a base salary, cash incentive awards, and stock units. The transition also involves the separation of Mr. Venkat Nachiappan from the company, who will receive severance and support for transitioning responsibilities.

Spark’s Take on ARHS Stock

According to Spark, TipRanks’ AI Analyst, ARHS is a Neutral.

Arhaus’s stock score reflects strong revenue growth and cash flow management but is tempered by declining profitability and high leverage. The technical analysis suggests a bearish trend, while valuation shows moderate pricing without dividend benefits. Earnings call insights are cautiously optimistic, supporting future growth plans despite macroeconomic challenges.

To see Spark’s full report on ARHS stock, click here.

Arhaus Reports Strong 2024 Financial Results Amid Expansion

Arhaus reported its financial results for the fourth quarter and full year 2024, highlighting a net revenue of $347 million for the quarter and $1,271 million for the year. Despite a decrease in gross margin and an increase in expenses, the company achieved a net income of $69 million for the year. The year was marked by significant showroom expansion, reaching 103 locations, and a strong cash position with no long-term debt. The company is well-positioned for future growth, with plans for further showroom openings and a robust pipeline toward its goal of 165 traditional showrooms.