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RH (RH)
NYSE:RH

RH (RH) AI Stock Analysis

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RH

RH

(NYSE:RH)

Rating:58Neutral
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 (RH) vs. SPDR S&P 500 ETF (SPY)

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 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 Key Performance Indicators (KPIs)

Any
Any
Store Count
Store Count
Indicates the total number of retail locations, providing insight into the company’s market presence and expansion strategy.
Chart InsightsRH's store count has shown a slight increase, reflecting strategic expansion efforts despite a challenging housing market. The recent earnings call highlights strong international demand, particularly in Europe, and plans for new design galleries, which align with this growth. However, the company faces risks from tariff disruptions and debt burdens, which could impact future expansion and profitability. The focus on reducing reliance on China and increasing U.S. production may mitigate some risks, supporting their long-term growth strategy.
Data provided by:Main Street Data

RH Earnings Call Summary

Earnings Call Date:Jun 13, 2025
(Q1-2025)
|
% Change Since: 5.55%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, international expansion, and positive cash flow amidst a challenging housing market and economic uncertainty. However, the disruptions caused by tariffs and a significant debt burden were notable concerns.
Q1-2025 Updates
Positive Updates
Revenue Growth Amidst Housing Market Challenges
Despite the challenging housing market conditions, RH achieved a 12% increase in revenue for the first quarter of fiscal 2025.
Strong International Performance
RH England's gallery demand increased by 47%, and online demand grew by 44% in the first quarter. Additionally, demand growth in Europe accelerated by 60% across RH Munich and RH Dusseldorf.
Positive Free Cash Flow
RH generated positive free cash flow of $34 million in the first quarter, with a forecasted free cash flow of $250 million to $350 million for fiscal 2025.
Expansion and Strategic Growth
RH plans the opening of seven new design galleries in various locations, and significant growth plans in Europe including the launch of RH Paris.
Margin and Cash Flow Projections
Forecasting adjusted operating margin of 14% to 15% and adjusted EBITDA margin of 20% to 21% for fiscal 2025, with reduced capital expenditure planned for future years.
Negative Updates
Impact of Tariffs and Economic Uncertainty
Uncertainty and disruptions caused by tariffs are expected to negatively impact revenues by approximately six points in the second quarter.
Delayed Launches Due to Tariff Uncertainty
The launch of a new concept has been delayed from the second half of 2025 to the spring of 2026 due to tariff uncertainties.
Challenges in the Outdoor Segment
The RH outdoor segment experienced a slowdown due to compressed peak selling season and market becoming highly promotional following reciprocal tariffs.
Debt and Interest Burden
RH is managing meaningful debt largely from stock repurchases, with a significant interest expense of $240 million per year affecting profitability.
Company Guidance
During the RH First Quarter 2025 Earnings Call, CEO Gary Friedman highlighted several key metrics and strategic initiatives that are guiding the company forward. Despite facing a challenging housing market, RH reported a 12% increase in revenue for the first quarter, with an adjusted operating margin of 7% and an adjusted EBITDA margin of 13.1%. The company generated a positive free cash flow of $34 million during the quarter. RH's international expansion is proving successful, with RH England's gallery demand up 47% and online demand up 44% in the first quarter. The company forecasts full-year demand at RH England to reach approximately $37 million to $39 million, with online demand at around $8 million. RH is also seeing acceleration in Europe, with 60% demand growth in the first quarter across comparable galleries in Munich and Dusseldorf. For fiscal 2025, RH is maintaining its guidance, projecting revenue growth of 10% to 13%, an adjusted operating margin of 14% to 15%, an adjusted EBITDA margin of 20% to 21%, and free cash flow of $250 million to $350 million. Additionally, the company plans to reduce sourcing from China, expecting receipts to decrease from 16% in Q1 to 2% in Q4, and aims for 52% of its upholstered furniture to be produced in the U.S. by the end of 2025.

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
67
Positive
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
40
Negative
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
55
Neutral
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.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue3.27B3.18B3.03B3.59B3.76B2.85B
Gross Profit1.45B1.41B1.39B1.81B1.86B1.33B
EBITDA464.27M453.28M523.59M774.84M1.07B612.12M
Net Income84.08M72.41M127.56M528.64M688.55M271.81M
Balance Sheet
Total Assets4.65B4.55B4.14B5.31B5.54B2.90B
Cash, Cash Equivalents and Short-Term Investments46.08M30.41M123.69M1.51B2.18B100.45M
Total Debt3.94B3.94B3.72B3.63B3.38B1.58B
Total Liabilities4.76B4.72B4.44B4.52B4.37B2.45B
Stockholders Equity-110.77M-163.59M-297.39M784.66M1.17B447.03M
Cash Flow
Free Cash Flow-172.25M-213.69M-67.14M230.04M476.73M389.64M
Operating Cash Flow47.61M17.09M202.21M403.69M662.11M500.77M
Investing Cash Flow-216.51M-240.41M-307.43M-171.07M-194.35M-197.60M
Financing Cash Flow112.50M130.59M-1.28B-902.48M1.61B-243.91M

RH Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price199.62
Price Trends
50DMA
191.45
Positive
100DMA
220.37
Negative
200DMA
295.64
Negative
Market Momentum
MACD
3.24
Negative
RSI
55.64
Neutral
STOCH
65.41
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 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$7.12B26.9915.30%10.71%-10.36%
WSWSM
80
Outperform
$20.81B19.1551.10%1.56%1.64%8.57%
ASASO
70
Neutral
$3.18B8.8120.14%1.09%-3.57%-17.43%
64
Neutral
$5.60B37.98-39.97%2.18%-32.87%
63
Neutral
$16.67B10.96-6.97%3.00%1.72%-24.21%
RHRH
58
Neutral
$3.72B47.45-38.18%8.31%14.65%
WW
55
Neutral
$7.06B17.86%-0.89%46.62%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RH
RH
199.62
-45.68
-18.62%
WSM
Williams-Sonoma
169.21
25.22
17.52%
FIVE
Five Below
128.78
27.84
27.58%
W
Wayfair
55.09
1.68
3.15%
ETSY
Etsy
53.46
-3.86
-6.73%
ASO
Academy Sports and Outdoors
49.16
-2.45
-4.75%

RH Corporate Events

Executive/Board ChangesShareholder Meetings
RH Shareholders Approve Key Proposals at Annual Meeting
Neutral
Jul 2, 2025

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.

Executive/Board ChangesBusiness Operations and Strategy
RH Appoints Lisa Chi as Co-Chief Officer
Positive
May 27, 2025

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.

Executive/Board Changes
RH Chief Legal Officer Announces Resignation
Neutral
Apr 28, 2025

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.

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.Date of analysis: Jun 26, 2025