RH (RH) AI Stock Analysis

• Market Cap: $3.85B
• Dividend Yield: N/A
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 48.9
• Beta (1Y): 2.83
• Revenue Growth: 8.31%
• EPS Growth: 14.65%
• Country: US
• Employees: 5,690
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Specialty Retail
• EPS (TTM): 0.13
• Shares Outstanding: 18,732,450
• 10 Day Avg. Volume: 1,018,790
• 30 Day Avg. Volume: 1,069,053
• PEG Ratio: 2.62
• Price to Book (P/B): -32.04
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -20.61
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 5.09
• Enterprise Value/Ebitda: 4.15
• 1Y Price Target: $263.38
• Price Target Upside: 31.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 60 Neutral
• Price Target: $223.00 ▲(11.08%Upside)

RH's stock score is driven by robust earnings call insights, highlighting revenue growth and strategic international expansion. However, financial performance concerns, particularly negative equity and high leverage, weigh heavily. The technical analysis shows some positive momentum, but high valuation limits upside potential. Addressing financial stability and leveraging growth opportunities are essential for enhancing investor confidence.

Positive Factors

Financial Performance

Generating free cash flow for the first time in six quarters indicates that RH is moving in the right direction.

Operating Margin

RH's operating margin was above expectations due to lower SG&A expenses, indicating efficient cost management.

Revenue Growth

RH's performance is supported by ongoing new collection rollout and ramp of the European galleries, contributing to revenue growth.

Negative Factors

Comparative Performance

RH will face increasingly difficult compares for the remainder of 2025.

Financial Risks

High financial leverage and excess inventory remain tangible risks for RH.

Market Demand

Growth at RH is likely to slow without improvement in the housing market.

RH Business Overview & Revenue Model

Company Description

RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, and child and teen furnishings. The company provides its products through its retail galleries; and Source Books, a series of catalogs, as well as online through rh.com, rhbabyandchild.com, rhteen.com, and rhmodern.com, as well as waterworks.com. As of January 29, 2022, it operated a total of 67 RH Galleries and 38 RH outlet stores in 30 states in the District of Columbia and Canada, as well as 14 Waterworks showrooms throughout the United States and the United Kingdom. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.

How the Company Makes Money

RH generates revenue primarily through the sale of luxury home furnishings and décor products. Its revenue model is based on both direct-to-consumer sales through its website and catalog, as well as through its network of physical retail galleries located in upscale markets. Key revenue streams for RH include furniture, lighting, textiles, and décor, with an emphasis on high-quality and design-forward products. The company also benefits from its membership model, where customers pay an annual fee to receive discounts and benefits, driving customer loyalty and repeat business. Additionally, RH's interior design services contribute to its revenue by offering personalized design solutions, which encourage further product purchases. Significant partnerships with designers, artisans, and manufacturers help RH maintain its luxury brand positioning and exclusive product offerings.

RH Financial Statement Overview

Summary

The company's strong gross profit margin of 44.5% is overshadowed by declining EBIT and EBITDA margins, a negative trend in revenue growth, high leverage, and negative equity, indicating financial instability. Liquidity is a concern with operating cash flows below net income and negative free cash flow.

Income Statement

The company's TTM gross profit margin is strong at 44.5%, indicating effective cost management. However, both EBIT and EBITDA margins have declined over time, with the TTM EBIT margin at 9.9% and EBITDA margin at 14.2%. Net profit margin stands at a modest 2.6%. The revenue growth rate shows a negative trend, indicating a decrease in total revenue compared to previous years, which is concerning.

Balance Sheet

The company's balance sheet reveals significant leverage with a negative stockholders' equity, resulting in an undefined debt-to-equity ratio. The negative equity is a major concern, indicating potential financial instability. Despite this, the company maintains a reasonable total asset base, but the equity ratio is negative due to the negative equity.

Cash Flow

The operating cash flow to net income ratio is 0.6, indicating that operating cash flows are below net income, which could be a liquidity concern. The free cash flow is negative, reflecting high capital expenditures. However, the free cash flow to net income ratio is -2.0, suggesting challenges in converting net income into free cash flow.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	3.18B	3.03B	3.59B	3.76B	2.85B
Gross Profit	1.41B	1.39B	1.81B	1.86B	1.33B
EBITDA	453.28M	523.59M	774.84M	1.07B	612.12M
Net Income	72.41M	127.56M	528.64M	688.55M	271.81M
Balance Sheet
Total Assets	4.55B	4.14B	5.31B	5.54B	2.90B
Cash, Cash Equivalents and Short-Term Investments	30.41M	123.69M	1.51B	2.18B	100.45M
Total Debt	3.94B	3.72B	3.63B	3.38B	1.58B
Total Liabilities	4.72B	4.44B	4.52B	4.37B	2.45B
Stockholders Equity	-163.59M	-297.39M	784.66M	1.17B	447.03M
Cash Flow
Free Cash Flow	-213.69M	-67.14M	230.04M	476.73M	389.64M
Operating Cash Flow	17.09M	202.21M	403.69M	662.11M	500.77M
Investing Cash Flow	-240.41M	-307.43M	-171.07M	-194.35M	-197.60M
Financing Cash Flow	130.59M	-1.28B	-902.48M	1.61B	-243.91M

RH Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 200.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RH, the sentiment is Negative. The current price of 200.76 is below the 20-day moving average (MA) of 204.60, above the 50-day MA of 193.83, and below the 200-day MA of 284.03, indicating a neutral trend. The MACD of 3.74 indicates Positive momentum. The RSI at 48.67 is Neutral, neither overbought nor oversold. The STOCH value of 39.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RH.

RH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	78 Outperform	$23.01B	21.17	51.10%	1.32%	1.64%	8.57%
FIVE	77 Outperform	$7.52B	28.62	15.30%	―	10.71%	-10.36%
ASO	72 Outperform	$3.38B	9.36	20.14%	0.95%	-3.57%	-17.43%
ETSY	63 Neutral	$5.78B	46.60	-39.97%	―	2.38%	-38.88%
RH	60 Neutral	$3.85B	48.88	-38.18%	―	8.31%	14.65%
Sector *	57 Neutral	HK$25.10B	4.09	-2.03%	5.85%	-0.24%	-68.05%
W	52 Neutral	$8.42B	―	17.86%	―	-0.89%	46.62%

RH Corporate Events

RH Shareholders Approve Key Proposals at Annual Meeting

At the annual meeting held on June 26, 2025, RH shareholders voted on three key proposals. They elected three Class I directors to the Board, approved executive compensation on a non-binding advisory basis, and ratified the appointment of PricewaterhouseCoopers LLP as the independent accounting firm for the fiscal year ending January 31, 2026. These decisions are expected to influence RH’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (RH) stock is a Hold with a $400.00 price target. To see the full list of analyst forecasts on RH stock, see the RH Stock Forecast page.

RH Appoints Lisa Chi as Co-Chief Officer

On May 20, 2025, RH announced the appointment of Lisa Chi as President, Co-Chief Merchandising & Creative Officer. Ms. Chi, who previously held senior roles at RH and Arhaus, will co-lead various functions alongside Eri Chaya. Her return is seen as a strategic move to enhance RH’s product and platform expansion. The company emphasizes its transparent sourcing practices compared to other furniture retailers, suggesting that it faces no greater market or financial risks.

The most recent analyst rating on (RH) stock is a Hold with a $400.00 price target. To see the full list of analyst forecasts on RH stock, see the RH Stock Forecast page.