Education
About Us
Working with TipRanks
Follow Us
RH (RH)
NYSE:RH
Top Page
RH
(NYSE:RH)
Select Model
Select Model
Rating:49Neutral
Price Target:
$170.00
▼(-20.91% Downside)
RH's overall stock score reflects significant financial challenges, particularly high leverage and declining profitability. While the earnings call provided some optimism with revenue growth and strategic expansion, the technical analysis and valuation indicate caution. The company's high debt levels and tariff impacts are major risks, overshadowing the positive aspects of its growth strategy.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong brand performance and market demand, supporting long-term business expansion and stability.
Market Share Gains
Gaining market share reflects competitive strength and effective strategy, enhancing RH's positioning in the luxury home sector.
International Expansion
International expansion into key markets like Paris, Milan, and London can drive growth and diversify revenue streams, reducing reliance on domestic sales.
Negative Factors
High Debt Levels
High debt levels can limit financial flexibility and increase risk, especially in volatile markets, potentially impacting long-term financial health.
Operating Margin Impact
Pressure on operating margins from tariffs can reduce profitability, affecting the company's ability to invest in growth and maintain competitive pricing.
Tariff Challenges
Ongoing tariff challenges can disrupt operations and increase costs, impacting supply chain efficiency and product pricing, which may affect customer demand.
RH (RH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.04B
Dividend YieldN/A
Average Volume (3M)1.03M
Price to Earnings (P/E)38.7
Beta (1Y)2.64
Revenue Growth9.74%
EPS Growth55.13%
CountryUS
Employees5,690
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.71
Shares Outstanding18,777,699
10 Day Avg. Volume861,974
30 Day Avg. Volume1,030,583
Financial Highlights & Ratios
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 Cap1.13
Enterprise Value/Revenue1.34
Enterprise Value/Gross Profit3.01
Enterprise Value/Ebitda9.01
Forecast
1Y Price Target
$203.45Price Target Upside-5.35% Downside
Rating ConsensusHold
Number of Analyst Covering13
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
RH Business Overview & Revenue Model
Company DescriptionRH, 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 MoneyRH 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 Key Performance Indicators (KPIs)
Any
Store Count
Indicates the total number of retail locations, providing insight into the company’s market presence and expansion strategy.
Indicates the total number of retail locations, providing insight into the company’s market presence and expansion strategy.
Data provided by:
The Fly
The FlyRH Earnings Call Summary
Earnings Call Date:Dec 11, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 01, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a robust growth trajectory with strong revenue and market share gains, despite significant challenges from tariffs and operational costs impacting margins. The company remains optimistic about its strategic investments, particularly in international markets, but faces difficulties from a high debt load and unpredictable tariff impacts.Q3-2025 Updates
Positive Updates
Revenue Growth
Revenue increased by 9% in the third quarter and up 18% on a two-year basis, demonstrating strong brand performance despite challenging market conditions.
Free Cash Flow
Generated $83 million of free cash flow in Q3, with year-to-date free cash flow reaching $198 million, on track for a range of $250 to $300 million for the year.
Market Share Gains
Significant market share gains on a two-year basis, ranging from a low of 12 points to a high of 28 points, primarily from high-end design showrooms and national brands.
International Expansion
Opened RH Paris, described as one of the most beautiful retail experiences, and preparing for RH Milan and RH London openings.
Negative Updates
Operating Margin Impact
Adjusted operating margin of 11.6% was below guidance due to higher than forecasted tariff expenses.
Tariff Challenges
Tariffs have disrupted supply chains, caused product delays, and increased prices, with 16 different tariff announcements over the past ten months.
High Debt Levels
Net debt at the end of the quarter was $2.427 billion, posing a potential risk to financial stability in uncertain markets.
Company Guidance
In the RH Third Quarter 2025 Earnings Call, the company reported a 9% increase in revenue for the third quarter, with a two-year growth rate of 18%, despite challenges in the housing market and tariff impacts. The adjusted operating margin was 11.6%, slightly below the 12.5% midpoint of guidance due to higher tariff expenses. Adjusted EBITDA margin stood at 17.6%, and free cash flow for Q3 was $83 million, contributing to a year-to-date free cash flow of $198 million. The company aims to achieve a full-year free cash flow between $250 million and $300 million. Additionally, RH reduced its inventory by 11% compared to the previous year and decreased net debt by $85 million from the second quarter, ending Q3 with net debt of $2.427 billion. The company projects fourth-quarter revenue growth of 7% to 8%, with an adjusted operating margin of 12.5% to 13.5% and an adjusted EBITDA margin of 18.7% to 19.6%. For the fiscal year 2025, RH expects revenue growth of 9% to 9.2%, an adjusted operating margin of 11.6% to 11.9%, and an adjusted EBITDA margin of 17.6% to 18%.RH Financial Statement Overview
Summary
RH's financial performance is challenged by declining profitability and high leverage. The income statement shows modest revenue growth but declining net profit margins. The balance sheet reveals high debt levels with a debt-to-equity ratio of 412.42, and negative return on equity. Cash flow is also concerning with a significant decline in free cash flow growth.Income Statement
The income statement shows a modest revenue growth rate of 2.16% TTM, but a declining trend in profitability with a net profit margin of 3.22% TTM, down from 14.72% in 2023. Gross profit margin remains stable at around 44.5%, indicating consistent cost management. However, the declining EBIT and EBITDA margins suggest pressure on operating efficiency.Balance Sheet
The balance sheet reveals significant financial leverage with a debt-to-equity ratio of 412.42 TTM, indicating high reliance on debt financing. The negative return on equity of -1.41% TTM highlights challenges in generating returns for shareholders. The equity ratio is low, reflecting potential financial instability.Cash Flow
Cash flow analysis shows a concerning decline in free cash flow growth at -351.69% TTM, indicating cash generation issues. The operating cash flow to net income ratio of 0.36 TTM suggests moderate cash conversion efficiency. The free cash flow to net income ratio of 0.38 TTM indicates limited cash available after capital expenditures.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.41B | 3.18B | 3.03B | 3.59B | 3.76B | 2.85B |
| Gross Profit | 1.52B | 1.41B | 1.39B | 1.81B | 1.86B | 1.33B |
| EBITDA | 507.43M | 453.28M | 523.59M | 774.84M | 1.07B | 612.12M |
| Net Income | 109.93M | 72.41M | 127.56M | 528.64M | 688.55M | 271.81M |
Balance Sheet | ||||||
| Total Assets | 4.79B | 4.55B | 4.14B | 5.31B | 5.54B | 2.90B |
| Cash, Cash Equivalents and Short-Term Investments | 43.09M | 30.41M | 123.69M | 1.51B | 2.18B | 100.45M |
| Total Debt | 3.97B | 3.94B | 3.72B | 3.75B | 3.43B | 1.62B |
| Total Liabilities | 4.79B | 4.72B | 4.44B | 4.52B | 4.37B | 2.45B |
| Stockholders Equity | 3.35M | -163.59M | -297.39M | 784.66M | 1.17B | 447.03M |
Cash Flow | ||||||
| Free Cash Flow | 128.12M | -213.69M | -67.14M | 230.04M | 476.73M | 389.64M |
| Operating Cash Flow | 337.40M | 17.09M | 202.21M | 403.69M | 662.11M | 500.77M |
| Investing Cash Flow | -232.95M | -240.41M | -307.43M | -171.07M | -194.35M | -197.60M |
| Financing Cash Flow | -148.82M | 130.59M | -1.28B | -902.48M | 1.61B | -243.91M |
RH Technical Analysis
Positive
214.94
Price Trends
168.30
Positive
189.24
Positive
192.98
Positive
Market Momentum
11.34
Negative
75.67
Negative
81.95
Negative
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 214.94 is above the 20-day moving average (MA) of 180.82, above the 50-day MA of 168.30, and above the 200-day MA of 192.98, indicating a bullish trend. The MACD of 11.34 indicates Negative momentum. The RSI at 75.67 is Negative, neither overbought nor oversold. The STOCH value of 81.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $23.61B | 21.88 | 56.92% | 1.37% | 5.10% | 7.59% | |
75 Outperform | $3.64B | 9.98 | 18.34% | 1.04% | -0.65% | -10.35% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $6.04B | 42.81 | ― | ― | 1.98% | -20.98% | |
53 Neutral | $4.66B | 7.16 | ― | 4.16% | -1.04% | -20.88% | |
52 Neutral | $14.79B | -44.33 | ― | ― | 3.35% | 42.99% | |
49 Neutral | $4.04B | 38.75 | ― | ― | 9.74% | 55.13% |
* Consumer Cyclical Sector Average
RH
RH
214.94
-204.58
-48.77%
BBWI
Bath & Body Works
22.77
-12.85
-36.08%
WSM
Williams-Sonoma
197.81
5.47
2.84%
W
Wayfair
113.45
69.74
159.55%
ETSY
Etsy
61.23
7.78
14.56%
ASO
Academy Sports and Outdoors
56.93
2.04
3.72%
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.