Arhaus (ARHS) AI Stock Analysis

• Market Cap: $1.56B
• Dividend Yield: N/A
• Average Volume (3M): 2.09M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 1.63
• Revenue Growth: 4.76%
• EPS Growth: -19.79%
• Country: US
• Employees: 2,390
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 0.25
• Shares Outstanding: 53,859,215
• 10 Day Avg. Volume: 1,808,396
• 30 Day Avg. Volume: 2,094,574
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 3.06
• Enterprise Value/Ebitda: 11.23
• 1Y Price Target: $12.45
• Price Target Upside: 12.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 71 Outperform
• Price Target: $12.00 ▲(8.50% Upside)

Arhaus's overall stock score is driven by strong financial performance and positive earnings call insights, highlighting record revenue and strategic advancements. However, technical analysis and valuation present moderate concerns, with mixed signals and a moderate P/E ratio. The absence of a dividend yield also impacts the valuation score.

Positive Factors

Revenue Growth

The record-breaking revenue indicates strong market demand and effective sales strategies, supporting long-term growth and market position.

Product Expansion

Entering the bath product segment diversifies Arhaus's offerings, potentially capturing new customer segments and enhancing revenue streams.

Cash Flow Strength

Strong cash flow supports operational stability and provides flexibility for strategic investments, ensuring sustainable business growth.

Negative Factors

Profit Margin Decline

Declining profit margins suggest rising operational costs or pricing pressures, which could impact long-term profitability if not addressed.

High Debt Reliance

High reliance on debt can limit financial flexibility and increase risk, potentially affecting the company's ability to invest in growth opportunities.

Tariff Impact

Tariff impacts can increase costs and reduce margins, potentially affecting competitiveness and profitability in the long term.

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

Arhaus demonstrates solid financial performance with consistent revenue growth and strong cash flow generation. However, declining profit margins and high reliance on debt pose potential risks if not managed carefully.

Income Statement

Arhaus has demonstrated consistent revenue growth over the years, with a solid revenue increase from 2021 to TTM (Trailing-Twelve-Months). However, there has been a decline in EBIT margin and net profit margin in the TTM, which suggests rising operational costs or pricing pressures. The gross profit margin remains strong, indicating effective cost management in production.

Balance Sheet

The balance sheet shows a stable equity base with an improving debt-to-equity ratio, indicating balanced leverage. However, the equity ratio is relatively low, suggesting that the company relies significantly on debt for financing. Return on equity has seen a decline in recent periods, which could impact investor confidence if not addressed.

Cash Flow

Arhaus displays robust operating cash flow, consistently covering its capital expenditures. The free cash flow has shown positive growth, although the free cash flow to net income ratio indicates some volatility in cash generation relative to profits. Overall, cash flow health remains strong, supporting ongoing operations and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.29B	1.27B	1.29B	1.23B	796.92M	507.43M
Gross Profit	501.76M	501.23M	540.42M	525.06M	329.93M	199.50M
EBITDA	136.79M	161.83M	227.06M	238.62M	57.74M	48.12M
Net Income	58.33M	68.55M	125.24M	136.63M	36.93M	17.84M
Balance Sheet
Total Assets	1.26B	1.21B	1.11B	931.79M	586.55M	315.94M
Cash, Cash Equivalents and Short-Term Investments	214.39M	197.51M	223.10M	145.18M	123.78M	50.74M
Total Debt	524.91M	499.50M	462.93M	381.98M	50.52M	47.60M
Total Liabilities	916.11M	862.57M	773.86M	722.10M	516.78M	352.04M
Stockholders Equity	348.83M	343.75M	340.24M	209.69M	69.77M	-36.09M
Cash Flow
Free Cash Flow	47.74M	39.74M	75.24M	21.80M	98.37M	137.42M
Operating Cash Flow	156.80M	147.11M	172.30M	74.45M	146.24M	150.44M
Investing Cash Flow	-101.22M	-99.53M	-96.72M	-52.66M	-47.87M	-13.01M
Financing Cash Flow	-74.10M	-72.95M	-1.80M	-177.00K	-31.47M	-98.33M

Arhaus Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 11.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 11.06 is below the 20-day moving average (MA) of 11.41, above the 50-day MA of 10.66, and above the 200-day MA of 9.85, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 48.17 is Neutral, neither overbought nor oversold. The STOCH value of 45.60 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
HVT.A	72 Outperform	367.81M	18.71	6.43%	5.67%	-8.93%	-50.32%
HVT	71 Outperform	367.81M	19.26	6.43%	5.65%	-8.93%	-50.32%
ARHS	71 Outperform	$1.56B	21.90	20.48%	―	4.76%	-19.79%
LZB	64 Neutral	1.39B	15.44	9.01%	2.61%	2.18%	-22.35%
TTSH	49 Neutral	293.63M	-10,933.33	-0.02%	―	-5.41%	-100.49%
MLKN	46 Neutral	1.36B	-35.89	-2.89%	3.74%	1.14%	-149.26%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%