RH (RH) AI Stock Analysis

• Market Cap: $3.21B
• Dividend Yield: N/A
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): 30.8
• 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: 1,551,895
• 30 Day Avg. Volume: 1,076,276
• 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: 1.42
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 3.01
• Enterprise Value/Ebitda: 9.01
• 1Y Price Target: $199.82
• Price Target Upside: 16.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13
• EPS Forecast (FY): 7.13
• Revenue Forecast (FY): $3.47B

• Rating: 49 Neutral
• Price Target: $170.00 ▼(-0.57% 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 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

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

• Technical Analysis Sentiment: Positive
• Last Price: 170.98
• 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 170.98 is above the 20-day moving average (MA) of 160.59, above the 50-day MA of 165.51, and below the 200-day MA of 195.59, indicating a neutral trend. The MACD of 1.29 indicates Negative momentum. The RSI at 57.66 is Neutral, neither overbought nor oversold. The STOCH value of 70.67 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
WSM	75 Outperform	$22.79B	20.99	56.92%	1.37%	5.10%	7.59%
ASO	75 Outperform	$3.58B	9.81	18.34%	0.97%	-0.65%	-10.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	57 Neutral	$5.36B	37.98	―	―	1.98%	-20.98%
BBWI	53 Neutral	$4.05B	6.08	―	4.04%	-1.04%	-20.88%
W	52 Neutral	$13.26B	-39.74	―	―	3.35%	42.99%
RH	49 Neutral	$3.21B	30.82	―	―	9.74%	55.13%

RH Corporate Events

RH Earnings Call: Growth Amid Tariff Challenges

The recent earnings call from RH paints a picture of a company navigating both growth and challenges. The sentiment expressed during the call was one of optimism tempered by caution. While RH is experiencing strong growth and successful international expansions, it faces significant challenges due to ongoing and potential new tariffs. The positive growth metrics and achievements in Europe are encouraging, but the uncertainties and financial impacts of tariffs present clear challenges for the company.

RH Reports Strong Q2 2025 Financial Performance

RH, a prominent player in the luxury home furnishings sector, has reported a robust financial performance for the second quarter of 2025, showcasing significant growth in both revenue and net income. The company, known for its high-end furniture and immersive gallery experiences, operates in the retail and hospitality industries with a unique approach that blends residential and commercial spaces.