RH (RH) AI Stock Analysis

• Market Cap: $3.73B
• Dividend Yield: N/A
• Average Volume (3M): 896.72K
• Price to Earnings (P/E): 35.8
• Beta (1Y): 2.64
• Revenue Growth: 9.74%
• EPS Growth: 55.13%
• Country: US
• Employees: 5,690
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 1.71
• Shares Outstanding: 18,777,699
• 10 Day Avg. Volume: 829,580
• 30 Day Avg. Volume: 896,717
• 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 Cap: 2.05
• Enterprise Value/Revenue: 2.25
• Enterprise Value/Gross Profit: 5.05
• Enterprise Value/Ebitda: 15.10
• 1Y Price Target: $211.64
• Price Target Upside: 6.44% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: $201.00 ▲(1.09% Upside)

The score is held back primarily by weak financial quality—sharp profitability compression, cash flow deterioration, and very high leverage. This is partially offset by strong technical momentum and a generally upbeat earnings outlook and guidance, but valuation remains expensive and tariff/margin and debt risks are material.

Positive Factors

Multi-channel premium retail model

RH's integrated showroom, e-commerce and membership model creates durable customer engagement and higher average transaction values. The gallery-style showrooms plus digital channels deepen brand loyalty and recurring spend, supporting stable revenue streams and resilience across cycles.

Stable gross margin

A consistent ~44.5% gross margin indicates enduring product pricing power and cost structure control in the luxury furnishings segment. This structural margin buffer helps absorb operating cost shocks and supports long-term profitability despite periodic tariff or SG&A fluctuations.

Sustained revenue and market share gains

Double-digit two-year growth and sizable market share gains show the brand is expanding within the premium home market. Such durable top-line momentum and share capture suggest the company can convert brand strength into sustained sales growth and scale benefits over multiple quarters.

Negative Factors

Extremely high financial leverage

Very high leverage materially reduces financial flexibility, raises refinancing and interest risk, and limits capacity to invest or withstand demand downturns. Over a multi-month horizon, elevated debt amplifies downside from slower cash generation or rising rates, constraining strategy.

Severe free cash flow deterioration

A dramatic drop in free cash flow undermines the company's ability to deleverage, fund expansion, or absorb shocks without external financing. Persistently weak cash conversion erodes strategic optionality and increases reliance on debt markets, heightening medium-term solvency risk.

Tariff-driven supply chain and margin risk

Ongoing tariff volatility creates structural cost and timing uncertainty, increasing input costs and causing delays. Such persistent trade-policy risk compresses operating margins, complicates sourcing strategies and inventory planning, and can erode competitive advantage over time.

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 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 Financial Statement Overview

Summary

Profitability has deteriorated (net margin 3.22% TTM vs. 14.72% in 2023) and free cash flow growth is sharply negative (-351.69% TTM). Balance sheet risk is elevated with extremely high leverage (debt-to-equity 412.42 TTM) and negative ROE (-1.41% TTM), despite stable gross margin (~44.5%).

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

• Technical Analysis Sentiment: Neutral
• Last Price: 198.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 198.83 is below the 20-day moving average (MA) of 215.02, above the 50-day MA of 184.33, and above the 200-day MA of 194.37, indicating a neutral trend. The MACD of 6.29 indicates Positive momentum. The RSI at 45.70 is Neutral, neither overbought nor oversold. The STOCH value of 8.74 is Positive, 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
WSM	75 Outperform	$24.43B	22.50	56.92%	1.37%	5.10%	7.59%
ASO	67 Neutral	$3.67B	10.05	18.34%	1.04%	-0.65%	-10.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
W	58 Neutral	$13.49B	―	―	―	3.35%	42.99%
ETSY	57 Neutral	$5.23B	37.02	―	―	1.98%	-20.98%
BBWI	53 Neutral	$4.46B	6.70	―	4.16%	-1.04%	-20.88%
RH	52 Neutral	$3.73B	35.84	―	―	9.74%	55.13%

RH Corporate Events

RH Announces Leadership Transition in Gallery Operations

On January 20, 2026, RH announced that it had reached a mutual understanding with Chief Gallery & Customer Officer Stefan Duban for his departure from the company, effective January 26, 2026, under the terms of his existing employment arrangements. The company reassigned his responsibilities to other senior leaders immediately, signaling a continuity-focused leadership transition in its gallery operations and customer strategy without indicating broader structural changes.

The most recent analyst rating on (RH) stock is a Buy with a $265.00 price target. To see the full list of analyst forecasts on RH stock, see the RH Stock Forecast page.