Arhaus (ARHS) AI Stock Analysis

• Market Cap: $1.18B
• Dividend Yield: N/A
• Average Volume (3M): 1.29M
• Price to Earnings (P/E): 16.1
• Beta (1Y): 1.70
• Revenue Growth: 7.36%
• EPS Growth: -6.85%
• Country: US
• Employees: 2,390
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 0.11
• Shares Outstanding: 53,947,910
• 10 Day Avg. Volume: 1,340,815
• 30 Day Avg. Volume: 1,285,825
• PEG Ratio: -11.49
• Price to Book (P/B): 3.77
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 26.74
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 1.08
• Enterprise Value/Gross Profit: 2.78
• Enterprise Value/Ebitda: 9.43
• 1Y Price Target: $11.71
• Price Target Upside: 26.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.51
• Revenue Forecast (FY): $1.45B

• Rating: 55 Neutral
• Price Target: $9.50 ▲(2.59% Upside)
• Action: Downgraded Date: 02/27/26
• Date: Action: Downgraded 02/27/26

ARHS scores mid-range primarily due to softened fundamentals (margin compression, volatile free cash flow, and leverage concerns) and weak technical momentum (price below key moving averages with negative MACD). These are partially offset by a reasonable P/E valuation and a generally positive earnings-call backdrop with growth initiatives, though tempered by demand volatility and tariff-related risk.

Positive Factors

Multi-year revenue growth and record 2025 sales

Arhaus demonstrated durable top-line expansion, growing revenue nearly threefold since 2020 and reporting record 2025 sales. That scale reflects a successful omni-channel model (showrooms + e‑commerce) and supports investments in assortment, fulfillment, and showroom expansion that underpin growth over the next 2–6 months and beyond.

Strong cash generation and liquidity position

The company converted profitable operations into meaningful cash, finishing 2025 debt-free with substantial cash reserves. Positive operating cash flow and positive free cash flow—despite volatility—provide flexibility to fund showroom builds, product investment, and capital returns while absorbing near-term shocks such as tariff moves or promotional shifts.

Differentiated product assortment and showroom expansion

Consistent new-product momentum and targeted showroom openings strengthen Arhaus’s differentiated premium positioning. Strong collection launches and in-home design services drive higher average order values and client loyalty, supporting sustained demand among higher‑end customers and enabling more resilient sales mix over time.

Negative Factors

Margin erosion from 2022–2023 peak levels

Declining gross and net margins indicate pressure on pricing power or rising costs, reducing operating leverage. Sustained margin compression limits reinvestment capacity and makes profitability more sensitive to cost shocks (tariffs, freight, promotions), increasing execution risk over the medium term unless cost or pricing dynamics improve.

Elevated leverage history and volatile free cash flow

Although equity improved since 2020, historically high leverage metrics and marked free cash flow volatility constrain strategic flexibility. If demand softens or costs rise, elevated leverage and inconsistent FCF reduce capacity for capex, showroom expansion, or discretionary returns without altering capital structure or sacrificing growth.

Material tariff exposure and demand volatility

Projected large tariff-driven cost increases and observed monthly demand swings pose structural profit and planning risks. Significant incremental costs (forecast $50–60M) can materially compress margins if not passed to customers, while demand volatility complicates inventory and showroom rollout planning, raising execution risk.

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 sale of its furniture and home decor products via its retail showrooms and e-commerce platform. The company operates a network of physical retail locations across the United States, which serve as both sales channels and brand experience centers. Key revenue streams include direct product sales, custom orders for furniture, and online sales, which have seen significant growth due to the increasing trend towards digital shopping. Additionally, Arhaus may benefit from partnerships with designers and artisans, enhancing its product offerings and brand appeal. The company also emphasizes an omnichannel approach, integrating online and offline shopping experiences, which helps to drive sales and customer loyalty.

Arhaus Financial Statement Overview

Summary

Multi-year revenue growth remains a strength, but profitability has cooled (gross margin down to ~39% in 2025 and net margin down to ~4.9%). Leverage is a concern per the balance sheet (debt-to-equity ~1.32–1.45 in 2023–2025), and free cash flow weakened and remains volatile despite positive operating cash flow.

Income Statement

Revenue has expanded meaningfully over the period (from ~$507M in 2020 to ~$1.38B in 2025), with 2025 returning to growth after a slight decline in 2024. Profitability, however, has cooled: gross margin has drifted down from the 2022–2023 peak (~43%/42%) to ~39% in 2025, and net margin fell from ~9.7% (2023) and ~11.1% (2022) to ~4.9% (2025). Bottom-line earnings remain positive but are well below the 2022–2023 level, suggesting weaker operating leverage and/or higher costs.

Balance Sheet

The balance sheet shows elevated leverage, with debt running above equity in recent years (debt-to-equity ~1.32–1.45 in 2023–2025), which can pressure flexibility if demand weakens. Equity has improved substantially versus 2020 (when equity was negative), and returns on equity remain solid in 2025 (~16%), but have come down sharply from the exceptionally strong 2022–2023 levels. Overall, the company has strengthened since 2020, yet leverage remains a key watch item.

Cash Flow

Cash generation is positive, with operating cash flow at ~$137M in 2025 and free cash flow at ~$59M. That said, free cash flow has been volatile and declined meaningfully in 2025 (down ~27% year over year) after a low 2024 and a stronger 2023. Free cash flow conversion versus net income is moderate in 2025 (~43%), and operating cash flow coverage is also moderate (~0.30–0.50 range in recent years), indicating cash conversion is decent but not consistently strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.38B	1.27B	1.29B	1.23B	796.92M
Gross Profit	536.41M	501.23M	540.42M	525.06M	329.93M
EBITDA	88.89M	161.83M	227.06M	238.62M	57.74M
Net Income	67.26M	68.55M	125.24M	136.63M	21.12M
Balance Sheet
Total Assets	1.39B	1.21B	1.11B	937.08M	586.55M
Cash, Cash Equivalents and Short-Term Investments	253.36M	197.51M	223.10M	145.18M	123.78M
Total Debt	580.58M	499.50M	450.42M	387.27M	50.52M
Total Liabilities	976.52M	862.57M	764.91M	727.39M	516.78M
Stockholders Equity	418.23M	343.75M	340.24M	209.69M	69.77M
Cash Flow
Free Cash Flow	58.98M	39.74M	75.24M	21.80M	98.37M
Operating Cash Flow	136.85M	147.11M	172.30M	77.46M	139.83M
Investing Cash Flow	-77.82M	-99.53M	-96.72M	-55.67M	-41.46M
Financing Cash Flow	-3.48M	-72.95M	-1.80M	-177.00K	-31.47M

Arhaus Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 9.26 is below the 20-day moving average (MA) of 9.73, below the 50-day MA of 10.52, and below the 200-day MA of 10.10, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 44.65 is Neutral, neither overbought nor oversold. The STOCH value of 19.78 is Positive, 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
HD	65 Neutral	$382.75B	27.02	145.54%	2.67%	7.50%	-0.38%
LZB	65 Neutral	$1.44B	17.51	8.11%	2.39%	1.78%	-25.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FND	59 Neutral	$7.51B	35.60	9.11%	―	6.04%	10.26%
HVT	58 Neutral	$415.18M	21.28	6.32%	5.44%	-1.05%	-24.24%
ARHS	55 Neutral	$1.18B	16.09	20.38%	―	7.36%	-6.85%
LESL	42 Neutral	$8.79M	-0.04	―	―	-6.63%	-904.47%

Arhaus Corporate Events

Arhaus Declares Special Dividend Amid Strong 2025 Results

For 2025, Arhaus reported record net revenue of $1.379 billion, up 8.5% year over year, with gross margin rising to $536 million and adjusted EBITDA increasing 8.9% to $145 million, although net income dipped 1.9% to $67 million. Operational momentum was supported by 13 showroom projects and mid-single-digit net unit growth, with comparable delivered sales up 3.6% and written sales up 1.3%.

The company ended 2025 debt-free with $253 million in cash and strong operating cash flow, enabling its board on February 17, 2026, to declare a $0.35 per-share special cash dividend payable March 31, 2026 to shareholders of record on March 18, 2026. Management signaled confidence in continued expansion, guiding 2026 net revenue to $1.43–$1.47 billion, adjusted EBITDA to as much as $161 million, and planning 10 to 14 showroom projects while maintaining substantial liquidity for growth investments and capital returns.

The most recent analyst rating on (ARHS) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.

Arhaus Appoints New Chief Merchandising Officer for Growth

On February 12, 2026, Arhaus, Inc., the premium home furnishings retailer, announced the appointment of Michael Rengel as Chief Merchandising Officer, effective February 23, 2026. Rengel will report to founder and CEO John Reed and lead merchandising and product strategy across furniture and décor, overseeing Product Development and Merchandising.

With more than 25 years of experience in merchandising, product and brand development, and sourcing, including his recent role as CMO at Phoenix Retail, Rengel is expected to bolster Arhaus’ assortment differentiation and inventory discipline. The move underscores Arhaus’ push to elevate product strategy, strengthen cross-functional collaboration, and support disciplined, long-term growth rooted in artisan craftsmanship and personalized client service.

The most recent analyst rating on (ARHS) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.

Arhaus Announces Board Resignation and Governance Adjustments

On February 2, 2026, Arhaus, Inc. announced that director John M. Roth resigned from its Board of Directors, with the company specifying that his departure did not stem from any disagreement regarding its operations, policies, or practices. Following his resignation, the board adjusted its structure by reducing the total number of directors from eleven to ten, signaling a modest change in its governance composition without indicating broader strategic or operational shifts.

The most recent analyst rating on (ARHS) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.