RH (RH) AI Stock Analysis

• Market Cap: $2.95B
• Dividend Yield: N/A
• Average Volume (3M): 914.90K
• Price to Earnings (P/E): 29.3
• Beta (1Y): 2.77
• Revenue Growth: 9.56%
• EPS Growth: 205.41%
• Country: US
• Employees: 5,690
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 2.93
• Shares Outstanding: 18,745,070
• 10 Day Avg. Volume: 998,600
• 30 Day Avg. Volume: 914,896
• PEG Ratio: -2.75
• Price to Book (P/B): -47.36
• Price to Sales (P/S): 2.44
• P/FCF Ratio: -36.26
• Enterprise Value/Market Cap: 2.65
• Enterprise Value/Revenue: 2.35
• Enterprise Value/Gross Profit: 5.27
• Enterprise Value/Ebitda: 16.92
• 1Y Price Target: $274.30
• Price Target Upside: 74.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: $158.00 ▲(0.26% Upside)

RH's overall stock score is primarily impacted by its weak financial performance, characterized by high leverage and negative equity. While the earnings call highlights strong growth and successful international expansion, the technical analysis and valuation suggest caution. The stock's high P/E ratio and lack of dividend yield, combined with bearish technical indicators, contribute to a lower overall score.

Positive Factors

Revenue Growth

The consistent revenue and demand growth indicate strong market presence and product appeal, supporting long-term business expansion despite external challenges.

International Expansion

Successful international expansion, particularly in Europe, diversifies revenue streams and reduces reliance on domestic markets, enhancing long-term growth prospects.

Operating Margin Improvement

Improved operating margins reflect enhanced operational efficiency and cost management, contributing to better profitability and financial resilience over time.

Negative Factors

Tariff Challenges

Tariff challenges introduce significant cost pressures and uncertainty, potentially impacting profitability and strategic planning in the medium term.

High Leverage

High leverage and negative equity indicate financial instability, limiting flexibility and increasing risk in economic downturns or adverse market conditions.

Cash Flow Decline

Declining free cash flow suggests challenges in cash generation, which could constrain investment in growth initiatives and impact financial health.

RH Business Overview & Revenue Model

Company Description

RH, formerly known as Restoration Hardware, is a premium home furnishings retailer that specializes in high-quality furniture, lighting, textiles, and decor. The company operates in the luxury home sector and offers a diverse range of products that cater to both residential and commercial markets. RH is known for its curated collections and a unique shopping experience that includes gallery-style showrooms and a strong online presence.

How the Company Makes Money

RH generates revenue primarily through the sale of its home furnishings and decor products. The company operates a multi-channel retail model, which includes a combination of physical showrooms, an e-commerce platform, and a catalog business. Key revenue streams include direct sales from showrooms, online sales, and membership-based services such as the RH Members program, which offers exclusive access to products and events. Additionally, RH has partnered with various brands and designers to expand its product offerings and enhance its market presence, contributing to its overall earnings. The company also benefits from a strong brand reputation and customer loyalty, which drive repeat business and higher average transaction values.

RH Financial Statement Overview

Summary

RH's financial performance is weak, with significant challenges in profitability and cash flow. The income statement shows low net profit margins and declining operational efficiency. The balance sheet is concerning due to high leverage and negative equity, indicating financial instability. Cash flow issues are evident with a significant decline in free cash flow and poor conversion of income into cash.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a slight revenue growth of 2.13%, but the gross profit margin has decreased compared to previous years. The net profit margin is low at 3.20%, reflecting challenges in maintaining profitability. EBIT and EBITDA margins have also declined, indicating reduced operational efficiency.

Balance Sheet

The balance sheet reveals significant financial leverage with a negative stockholders' equity, leading to a high and negative debt-to-equity ratio. This indicates potential financial instability. The return on equity is negative, reflecting losses and poor shareholder returns. The equity ratio is also concerning, suggesting high reliance on debt financing.

Cash Flow

Cash flow analysis shows a decline in free cash flow, with a negative growth rate of -70.45% in the TTM period. The operating cash flow to net income ratio is low, indicating challenges in converting income into cash. The free cash flow to net income ratio is negative, highlighting cash flow issues despite reported net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.34B	3.18B	3.03B	3.59B	3.76B	2.85B
Gross Profit	1.49B	1.41B	1.39B	1.81B	1.86B	1.33B
EBITDA	463.25M	453.28M	523.59M	774.84M	1.07B	612.12M
Net Income	106.83M	72.41M	127.56M	528.64M	688.55M	271.81M
Balance Sheet
Total Assets	4.70B	4.55B	4.14B	5.31B	5.54B	2.90B
Cash, Cash Equivalents and Short-Term Investments	34.56M	30.41M	123.69M	1.51B	2.18B	100.45M
Total Debt	1.25B	3.94B	3.72B	3.75B	3.38B	1.58B
Total Liabilities	4.74B	4.72B	4.44B	4.52B	4.37B	2.45B
Stockholders Equity	-40.90M	-163.59M	-297.39M	784.66M	1.17B	447.03M
Cash Flow
Free Cash Flow	-50.91M	-213.69M	-67.14M	230.04M	476.73M	389.64M
Operating Cash Flow	174.11M	17.09M	202.21M	403.69M	662.11M	500.77M
Investing Cash Flow	-249.79M	-240.41M	-307.43M	-171.07M	-194.35M	-197.60M
Financing Cash Flow	118.72M	130.59M	-1.28B	-902.48M	1.61B	-243.91M

RH Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 157.59
• 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 RH, the sentiment is Neutral. The current price of 157.59 is above the 20-day moving average (MA) of 156.55, below the 50-day MA of 178.49, and below the 200-day MA of 208.96, indicating a neutral trend. The MACD of -7.38 indicates Negative momentum. The RSI at 45.97 is Neutral, neither overbought nor oversold. The STOCH value of 77.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RH.

RH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	75 Outperform	$21.49B	19.79	56.92%	1.42%	5.10%	7.59%
ASO	65 Neutral	$3.21B	9.04	18.42%	1.04%	-2.20%	-17.95%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BBWI	57 Neutral	$3.56B	5.35	―	4.60%	-1.04%	-20.88%
W	57 Neutral	$14.44B	―	―	―	3.35%	42.99%
ETSY	55 Neutral	$5.35B	37.91	―	―	1.98%	-20.98%
RH	48 Neutral	$2.95B	29.31	―	―	9.56%	205.41%

RH Corporate Events

RH Earnings Call: Growth Amid Tariff Challenges

The recent earnings call from RH paints a picture of a company navigating both growth and challenges. The sentiment expressed during the call was one of optimism tempered by caution. While RH is experiencing strong growth and successful international expansions, it faces significant challenges due to ongoing and potential new tariffs. The positive growth metrics and achievements in Europe are encouraging, but the uncertainties and financial impacts of tariffs present clear challenges for the company.

RH Reports Strong Q2 2025 Financial Performance

RH, a prominent player in the luxury home furnishings sector, has reported a robust financial performance for the second quarter of 2025, showcasing significant growth in both revenue and net income. The company, known for its high-end furniture and immersive gallery experiences, operates in the retail and hospitality industries with a unique approach that blends residential and commercial spaces.