RH (RH) AI Stock Analysis

• Market Cap: $3.72B
• Dividend Yield: N/A
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 47.5
• Beta (1Y): 2.84
• Revenue Growth: 8.31%
• EPS Growth: 14.65%
• Country: US
• Employees: 5,690
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Specialty Retail
• EPS (TTM): 0.13
• Shares Outstanding: 18,732,450
• 10 Day Avg. Volume: 1,050,427
• 30 Day Avg. Volume: 1,420,914
• PEG Ratio: 2.64
• Price to Book (P/B): -32.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -20.75
• Enterprise Value/Market Cap: 2.00
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 5.11
• Enterprise Value/Ebitda: 4.16
• 1Y Price Target: $262.43
• Price Target Upside: 31.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 58 Neutral
• Price Target: $194.00 ▼(-2.82%Downside)

RH's overall stock score is primarily impacted by its financial performance challenges, including negative equity and liquidity constraints. The company's high valuation adds risk, although technical signals suggest potential support. The optimistic earnings call guidance and corporate actions provide some positive outlook, but uncertainties remain.

Positive Factors

Earnings and Cash Flow

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

Revenue Growth

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

Negative Factors

Inventory Management

Some pressure on margin can be expected from the clearing of excess inventory.

Market Challenges

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

RH shows strengths in maintaining decent gross margins but faces significant financial challenges. The decline in revenue growth and high leverage present risks, with negative equity indicating potential instability. Cash flow issues further suggest liquidity constraints.

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	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	3.27B	3.18B	3.03B	3.59B	3.76B	2.85B
Gross Profit	1.45B	1.41B	1.39B	1.81B	1.86B	1.33B
EBITDA	464.27M	453.28M	523.59M	774.84M	1.07B	612.12M
Net Income	84.08M	72.41M	127.56M	528.64M	688.55M	271.81M
Balance Sheet
Total Assets	4.65B	4.55B	4.14B	5.31B	5.54B	2.90B
Cash, Cash Equivalents and Short-Term Investments	46.08M	30.41M	123.69M	1.51B	2.18B	100.45M
Total Debt	3.94B	3.94B	3.72B	3.63B	3.38B	1.58B
Total Liabilities	4.76B	4.72B	4.44B	4.52B	4.37B	2.45B
Stockholders Equity	-110.77M	-163.59M	-297.39M	784.66M	1.17B	447.03M
Cash Flow
Free Cash Flow	-172.25M	-213.69M	-67.14M	230.04M	476.73M	389.64M
Operating Cash Flow	47.61M	17.09M	202.21M	403.69M	662.11M	500.77M
Investing Cash Flow	-216.51M	-240.41M	-307.43M	-171.07M	-194.35M	-197.60M
Financing Cash Flow	112.50M	130.59M	-1.28B	-902.48M	1.61B	-243.91M

RH Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 199.62
• 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 Neutral. The current price of 199.62 is above the 20-day moving average (MA) of 190.45, above the 50-day MA of 191.45, and below the 200-day MA of 295.64, indicating a neutral trend. The MACD of 3.24 indicates Negative momentum. The RSI at 55.64 is Neutral, neither overbought nor oversold. The STOCH value of 65.41 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
FIVE	83 Outperform	$7.12B	26.99	15.30%	―	10.71%	-10.36%
WSM	80 Outperform	$20.81B	19.15	51.10%	1.56%	1.64%	8.57%
ASO	70 Neutral	$3.18B	8.81	20.14%	1.09%	-3.57%	-17.43%
ETSY	64 Neutral	$5.60B	37.98	-39.97%	―	2.18%	-32.87%
Sector *	63 Neutral	$16.67B	10.96	-6.97%	3.00%	1.72%	-24.21%
RH	58 Neutral	$3.72B	47.45	-38.18%	―	8.31%	14.65%
W	55 Neutral	$7.06B	―	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.

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.