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RH
(NYSE:RH)
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Rating:53Neutral
Price Target:
$178.00
▲(2.00% Upside)
Action:Reiterated
Date:07/24/26
RH scores in the low-to-mid range primarily due to weakened financial performance (sharp revenue/margin compression) and very high leverage with a thin equity cushion, partially offset by improved recent cash generation. Technicals are supportive with the stock trading above key moving averages and moderately positive momentum. Valuation is a headwind at ~32x earnings with no dividend yield provided. The earnings call adds a modest positive tilt from raised guidance and a clear H2 ramp plan, tempered by significant near-term margin drag and macro sensitivity.
Positive Factors
Improved cash generation
Sustained positive operating cash flow and free cash flow provide a durable funding source to support capital spending, asset monetization targets and deleveraging. Consistent cash generation reduces refinancing pressure and underpins strategic investments even if revenue recovers unevenly.
Negative Factors
Extremely high leverage
Very elevated leverage materially limits financial flexibility and increases refinancing and solvency risk if cash generation weakens. A thin equity cushion raises sensitivity to operating volatility and makes achievement of the debt‑free 2029 target reliant on consistent asset sales and execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved cash generation
Sustained positive operating cash flow and free cash flow provide a durable funding source to support capital spending, asset monetization targets and deleveraging. Consistent cash generation reduces refinancing pressure and underpins strategic investments even if revenue recovers unevenly.
Read all positive factors
RH Key Performance Indicators (KPIs)
RH (RH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.13B
Dividend YieldN/A
Average Volume (3M)894.21K
Price to Earnings (P/E)30.1
Beta (1Y)2.53
Revenue Growth4.84%
EPS Growth21.25%
CountryUS
Employees7,230
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)5.49
Shares Outstanding18,900,969
10 Day Avg. Volume749,448
30 Day Avg. Volume894,212
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)61.53
Price to Sales (P/S)1.08
P/FCF Ratio14.77
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$175.80Price Target Upside0.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)4.9
Revenue Forecast (FY)$3.63B
RH Business Overview & Revenue Model
Company Description
RH, along with its various associated businesses, functions as a prominent retailer specializing in home furnishings. Its extensive product portfolio spans categories such as furniture, lighting, textiles, bathware, decor, outdoor and garden essen...
How the Company Makes Money
RH primarily makes money by selling luxury home furnishings and related products directly to consumers. Its core revenue stream is product sales across major categories such as furniture, lighting, textiles, rugs, bath, décor, and outdoor furnishi...
RH Earnings Call Summary
Earnings Call Date:Jun 11, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Sep 03, 2026
Earnings Call Sentiment Neutral
The call mixed a clear operating beat and an upgraded FY26 outlook with an ambitious strategic push (RH Estates and major European galleries) and a concrete plan to convert backorders and drive H2 acceleration. However, material near-term margin headwinds from international preopening/start-up costs (hundreds of basis points), elevated backorders (~$75M), post‑COVID capital cost inflation, and macro weakness temper the optimism. Management emphasized long-term upside (IP, unique product assortment, trade program, and deleveraging actions) while acknowledging short-term execution and cost pressures.Positive Updates
Q1 Revenue and EBITDA Beat
Reported first quarter revenue of $800.3 million and adjusted EBITDA margin of 7.1%, both exceeding the high end of company expectations.
Negative Updates
Elevated Backorders and Tariff-Related Supply Issues
Backorder and special order balances were approximately $75 million higher year-over-year (about 4.5% of revenue), driven primarily by tariff-related resourcing and logistics; management confirmed forward guidance does not assume additional tariff refunds.
Read all updates
Q1-2026 Updates
Positive
Negative
Q1 Revenue and EBITDA Beat
Reported first quarter revenue of $800.3 million and adjusted EBITDA margin of 7.1%, both exceeding the high end of company expectations.
Read all positive updates
Company Guidance
RH reported Q1 FY26 revenue of $800.3 million and adjusted EBITDA margin of 7.1% (above the high end of expectations) and raised its FY26 outlook to revenue growth of +4.5%–8%, adjusted EBITDA margin of 14.2%–16% and adjusted free cash flow of $300–$400 million (the full‑year outlook includes an estimated -270 basis‑point EBITDA drag from international pre‑opening/start‑up costs). Q2 guidance is revenue growth of +0.5%–2.5% and adjusted EBITDA margin of 11.5%–13% (including an approximate -380 bps pre‑opening/start‑up impact). Management noted backorder/special‑order balances are roughly $75 million higher year over year, expects a 4.5‑percentage‑point H2 benefit from backlog reduction plus 2.5 ppts from new‑store growth and 5 ppts from RH Estates (supporting a move from roughly flat H1 to +12% in H2), guidance does not assume any further tariff refunds, and the company targets ~$200–$250 million of asset sales per year and a goal of being debt‑free by 2029.RH Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
18
Very Negative
Cash Flow
52
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.43B | 3.44B | 3.18B | 3.03B | 3.59B | 3.76B |
| Gross Profit | 1.49B | 1.52B | 1.41B | 1.39B | 1.81B | 1.86B |
| EBITDA | 519.86M | 540.82M | 453.28M | 523.59M | 774.84M | 1.07B |
| Net Income | 103.05M | 124.79M | 72.41M | 127.56M | 528.64M | 688.55M |
Balance Sheet | ||||||
| Total Assets | 4.95B | 4.84B | 4.55B | 4.14B | 5.31B | 5.54B |
| Cash, Cash Equivalents and Short-Term Investments | 53.80M | 41.19M | 30.41M | 123.69M | 1.51B | 2.18B |
| Total Debt | 3.85B | 3.97B | 3.94B | 3.72B | 3.75B | 3.43B |
| Total Liabilities | 4.89B | 4.78B | 4.72B | 4.44B | 4.52B | 4.37B |
| Stockholders Equity | 56.93M | 60.60M | -163.59M | -297.39M | 784.66M | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | 220.92M | 252.40M | -213.69M | -67.14M | 230.04M | 476.73M |
| Operating Cash Flow | 410.19M | 452.24M | 17.09M | 202.21M | 403.69M | 662.11M |
| Investing Cash Flow | -209.96M | -223.69M | -240.41M | -307.43M | -171.07M | -194.35M |
| Financing Cash Flow | -192.98M | -219.40M | 130.59M | -1.28B | -902.48M | 1.61B |
RH Technical Analysis
Neutral
174.51
Price Trends
159.72
Positive
144.95
Positive
163.34
Positive
Market Momentum
6.55
Positive
55.08
Neutral
31.81
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 174.51 is above the 20-day moving average (MA) of 173.90, above the 50-day MA of 159.72, and above the 200-day MA of 163.34, indicating a neutral trend. The MACD of 6.55 indicates Positive momentum. The RSI at 55.08 is Neutral, neither overbought nor oversold. The STOCH value of 31.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RH.
RH Risk Analysis
RH disclosed 35 risk factors in its most recent earnings report. RH reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RH Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $26.92B | 25.24 | 53.29% | 1.25% | 1.30% | 1.14% | |
65 Neutral | $2.94B | 8.18 | 18.01% | 1.20% | 3.77% | 4.71% | |
64 Neutral | $7.75B | 28.26 | -25.47% | ― | 1.78% | 75.71% | |
63 Neutral | $4.06B | 5.80 | -52.38% | 4.02% | -1.40% | -4.34% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $11.21B | -36.44 | 10.98% | ― | 6.80% | 18.24% | |
53 Neutral | $3.13B | 30.15 | 515.43% | ― | 4.84% | 21.25% |
* Consumer Cyclical Sector Average
RH
RH
165.52
-51.37
-23.68%
BBWI
Bath & Body Works
20.12
-7.58
-27.35%
WSM
Williams-Sonoma
228.66
30.92
15.64%
W
Wayfair
84.90
11.42
15.54%
ETSY
Etsy
81.68
24.37
42.52%
ASO
Academy Sports and Outdoors
47.45
-3.52
-6.90%
RH Corporate Events
Business Operations and StrategyExecutive/Board Changes
RH Appoints Chief Customer Experience & Values Officer
Positive
Jul 23, 2026
On July 23, 2026, RH announced internal leadership changes, promoting longtime executive Sandy Pilon to the newly defined role of Chief Customer Experience Values Officer. Pilon, who has spent 18 years at RH in senior roles including Chief People...
Regulatory Filings and Compliance
RH CEO Gary Friedman Sells Shares, Retains Large Stake
Neutral
Jul 8, 2026
On July 8, 2026, RH disclosed that Chairman and Chief Executive Officer Gary Friedman sold a total of 125,000 shares of RH common stock between July 6 and July 8, 2026. Following these transactions, he continues to hold beneficial ownership of 4,9...
Executive/Board ChangesShareholder Meetings
RH Shareholders Approve Directors, Pay Plan, Auditor
Positive
Jun 25, 2026
At its annual meeting of shareholders held on June 18, 2026, RH investors elected three Class II directors—Hilary Krane, Katie Mitic, and Ali Rowghani—to serve three-year terms extending to the 2029 shareholders’ meeting. Shareho...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.