Arhaus (ARHS) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: N/A
• Average Volume (3M): 1.55M
• Price to Earnings (P/E): 19.5
• Beta (1Y): 1.47
• Revenue Growth: 0.71%
• EPS Growth: -45.31%
• Country: US
• Employees: 2,390
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Home Improvement
• EPS (TTM): 0.03
• Shares Outstanding: 53,818,123
• 10 Day Avg. Volume: 2,060,644
• 30 Day Avg. Volume: 1,548,881
• PEG Ratio: -1.30
• Price to Book (P/B): 3.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.95
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 3.09
• Enterprise Value/Ebitda: 2.52
• 1Y Price Target: $10.28
• Price Target Upside: 27.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 70 Outperform
• Price Target: $9.50 ▲(17.72%Upside)

Arhaus receives a score of 70.1, driven by solid financial performance with strong revenue growth and cash flow, offset by declining profit margins and high debt reliance. Technical indicators suggest medium-term strength, while valuation is reasonable. The earnings call reflects strategic growth but also highlights challenges. The recent CFO appointment is a positive corporate development.

Positive Factors

Demand

Strong demand comparisons in the first quarter are a positive for the company.

Executive 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.

Growth Potential

The long-term growth potential, along with increasing visibility into margin improvements following a multiyear investment era and stability of a new management team, should provide support for the stock.

Negative Factors

Management and Leadership

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

Margins

EBITDA margins have declined a remarkable 10% on average in the second half over the last two years, and 2025 guidance calls for no margin expansion.

Profitability

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

Arhaus Business Overview & Revenue Model

Company Description

Arhaus (ARHS) is a high-end furniture retailer that specializes in designing and selling unique, handcrafted home furnishings. The company operates in the retail sector, offering a wide range of furniture, lighting, rugs, and home decor. Arhaus is committed to sustainability and quality craftsmanship, often partnering with artisans around the world to create exclusive products. Its offerings are available through their retail stores across the United States, as well as through their online platform.

How the Company Makes Money

Arhaus generates revenue primarily through the sale of its home furnishings and decor products. The company's key revenue streams include in-store sales from its network of retail locations and online sales through its website. Arhaus focuses on providing a differentiated shopping experience by offering exclusive, high-quality products that appeal to consumers seeking unique and sustainable home furnishings. Additionally, the company may engage in partnerships with global artisans, enhancing its product offerings and market appeal. Arhaus's focus on craftsmanship and sustainability helps differentiate its brand in the competitive retail market, driving customer loyalty and repeat business.

Arhaus Financial Statement Overview

Summary

Arhaus shows solid financial performance with consistent revenue growth and strong cash flow generation. However, declining profit margins and high reliance on debt present 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	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
EBITDA	161.83M	227.06M	238.62M	57.74M	48.12M
Net Income	68.55M	125.24M	136.63M	36.93M	17.84M
Balance Sheet
Total Assets	1.21B	1.11B	931.79M	586.55M	315.94M
Cash, Cash Equivalents and Short-Term Investments	197.51M	223.10M	145.18M	123.78M	50.74M
Total Debt	499.50M	462.93M	381.98M	50.52M	47.60M
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: Negative
• Last Price: 8.07
• 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 Negative. The current price of 8.07 is below the 20-day moving average (MA) of 8.86, below the 50-day MA of 8.67, and below the 200-day MA of 9.62, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 36.80 is Neutral, neither overbought nor oversold. The STOCH value of 11.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARHS.

Arhaus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HVT	70 Outperform	$335.46M	16.31	6.97%	6.16%	-12.29%	-55.73%
ARHS	70 Outperform	$1.15B	19.47	18.39%	―	0.71%	-45.31%
LZB	70 Outperform	$1.52B	15.81	9.84%	2.37%	3.04%	-16.49%
HVT.A	69 Neutral	$335.90M	16.40	6.97%	5.72%	-12.29%	-55.73%
TTSH	65 Neutral	$298.80M	374.73	0.66%	―	-6.41%	-91.36%
MLKN	63 Neutral	$1.34B	46.43	2.28%	3.80%	-2.68%	-56.16%
Sector *	62 Neutral	C$5.19B	8.79	20.23%	3.49%	3.08%	9.19%

Arhaus Corporate Events

Arhaus Appoints Samir Desai to Board of Directors

Arhaus, Inc. announced the appointment of Samir Desai to its Board of Directors as an independent director on June 27, 2025. Desai, who brings significant digital and technology expertise from his roles at Abercrombie & Fitch Co. and Equinox Group, will serve on the Board’s Technology Committee. This appointment increases the Board’s size from ten to eleven members, reflecting Arhaus’s focus on strengthening its technological capabilities.

The most recent analyst rating on (ARHS) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.

Arhaus Announces Departure of Chief Merchandising Officer

On May 16, 2025, Arhaus, Inc. announced the separation of Lisa Chi, who previously served as the Chief Merchandising Officer. During the Annual Meeting of Stockholders held on May 15, 2025, Albert Adams, Stuart Burgdoerfer, John Kyees, and John Roth were elected as Directors, and the compensation for named executive officers and the selection of PricewaterhouseCoopers LLP as independent accountants were approved.

The most recent analyst rating on (ARHS) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Arhaus stock, see the ARHS Stock Forecast page.

Arhaus Reports Q1 2025 Revenue Increase Amid Challenges

Arhaus reported a 5.5% increase in net revenue to $311 million for the first quarter of 2025, despite a 67.6% drop in net income to $5 million. The company plans to expand its showroom projects and reduce China sourcing, reflecting a cautious outlook due to macroeconomic volatility and tariff-related challenges.

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.