RH (RH) AI Stock Analysis

• Market Cap: $3.54B
• Dividend Yield: N/A
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 45.0
• Beta (1Y): 2.89
• Revenue Growth: 8.31%
• EPS Growth: 14.65%
• Country: US
• Employees: 5,690
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Specialty Retail
• EPS (TTM): 0.13
• Shares Outstanding: 18,732,450
• 10 Day Avg. Volume: 2,144,492
• 30 Day Avg. Volume: 1,365,110
• PEG Ratio: -0.45
• Price to Book (P/B): 9.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.77
• Enterprise Value/Market Cap: 2.66
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 6.66
• Enterprise Value/Ebitda: 5.21
• 1Y Price Target: $269.44
• Price Target Upside: 42.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 56 Neutral
• Price Target: $195.00 ▲(3.02%Upside)

The overall stock score reflects RH's financial challenges, including revenue decline and negative equity, which pose significant risks. Technical indicators point to a bearish trend, while the high P/E ratio suggests overvaluation. Positive elements include strong earnings call highlights, particularly international expansion and cash flow improvements, partially offset by tariff and debt concerns.

Positive Factors

Business Strategy

RH is lowering its exposure to China, which could be seen as a strategic move in a challenging tariff environment.

Financial Performance

A stabilization in demand trends and reaffirmed guidance provide better visibility into improving earnings and free cash flow.

Operational Efficiency

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

Negative Factors

Financial Leverage

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

Guidance and Forecasts

The chances of RH lowering its FY’25 guidance have increased due to slowing data.

Market Conditions

The operating environment remains a risk with lingering tariff uncertainty and a weak housing market affecting industry trends.

RH Business Overview & Revenue Model

Company Description

RH, formerly known as Restoration Hardware, is a luxury home furnishings retailer headquartered in Corte Madera, California. The company operates across several sectors, including furniture, lighting, textiles, bathware, décor, outdoor and garden, as well as baby and teen furnishings. RH is known for its high-end products and unique design aesthetic, often showcased in its expansive and meticulously designed gallery spaces. Additionally, RH offers interior design services to enhance customer experience.

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

RH faces financial challenges with declining profitability, negative equity, and cash flow pressures, despite a strong gross profit margin. The financial strain is evident with a negative stockholders' equity and high debt levels.

Income Statement

RH has shown a declining trend in revenue growth and margins over the past few years. The gross profit margin is strong at 44.5% in 2025, but net profit margin has decreased to 2.3%, indicating challenges in maintaining profitability. EBIT and EBITDA margins have also contracted, highlighting cost pressures.

Balance Sheet

The balance sheet reveals financial strain with negative stockholders' equity in the latest report, leading to a concerning debt-to-equity position. The debt remains high, exacerbating the risk profile. Equity ratio is negative, reflecting a weak capital structure.

Cash Flow

Cash flow analysis shows a decline in operating cash flow, with free cash flow turning negative in 2025, indicating cash management issues. The operating cash flow to net income ratio has decreased, signaling potential liquidity challenges.

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
	EBIT
322.59M	366.07M	722.16M	927.18M	466.86M
	EBITDA
453.28M	523.59M	774.84M	1.07B	612.12M
	Net Income Common Stockholders
72.41M	127.56M	528.64M	688.55M	271.81M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.41M	123.69M	1.51B	2.18B	100.45M
	Total Assets
4.55B	4.14B	5.31B	5.54B	2.90B
	Total Debt
3.94B	3.72B	3.63B	3.38B	1.58B
	Net Debt
3.91B	3.59B	2.11B	1.21B	1.48B
	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: Positive
• Last Price: 189.29
• 50DMA: Positive
• 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 Positive. The current price of 189.29 is above the 20-day moving average (MA) of 185.41, above the 50-day MA of 183.72, and below the 200-day MA of 300.85, indicating a neutral trend. The MACD of -3.13 indicates Negative momentum. The RSI at 50.82 is Neutral, neither overbought nor oversold. The STOCH value of 37.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RH.

RH Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FIVE	83 Outperform	$6.71B	25.54	15.30%	―	10.71%	-10.36%
WSM	75 Outperform	$19.45B	17.90	51.10%	1.71%	1.64%	8.57%
ASO	75 Outperform	$2.90B	8.02	20.14%	1.19%	-3.57%	-17.43%
ETSY	68 Neutral	$5.62B	38.28	-39.97%	―	2.18%	-32.87%
Sector *	62 Neutral	$6.88B	11.07	2.77%	4.28%	2.67%	-24.94%
RH	56 Neutral	$3.54B	44.95	-38.18%	―	8.31%	14.65%
W	44 Neutral	$6.21B	―	17.86%	―	-0.89%	46.62%

RH Corporate Events

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.

RH Chief Legal Officer Announces Resignation

Edward Lee, Chief Legal & Compliance Officer of RH, has announced his intention to resign from his position effective June 20, 2025. He plans to take on a new role as Chief Legal Officer at another company, and RH has begun searching for his replacement.

RH Releases Fiscal 2025 Outlook Amid Tariff Changes

On April 4, 2025, RH issued a press release addressing the impact of reciprocal tariffs announced on April 2, 2025, and introduced its fiscal 2025 free cash flow outlook. The company reported a significant increase in net revenues and RH Brand demand, despite operating in a challenging housing market. RH has successfully resourced much of its production from China to Vietnam and North Carolina, which is expected to be beneficial if tariffs are reduced. The company believes it has a transparent sourcing strategy compared to competitors and anticipates maintaining its market position without additional financial risks.