Richelieu Hardware (RCH) AI Stock Analysis

• Market Cap: C$2.35B
• Dividend Yield: 1.53%
• Average Volume (3M): 117.78K
• Price to Earnings (P/E): 27.6
• Beta (1Y): 0.73
• Revenue Growth: 6.61%
• EPS Growth: -4.81%
• Country: CA
• Employees: 3,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): N/A
• Shares Outstanding: 54,920,338
• 10 Day Avg. Volume: 154,390
• 30 Day Avg. Volume: 117,778
• PEG Ratio: 38.43
• Price to Book (P/B): 2.23
• Price to Sales (P/S): 1.09
• P/FCF Ratio: 11.64
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: C$47.00 ▲(14.72% Upside)

The score is driven primarily by solid financial footing (strong balance sheet and improving cash generation) and constructive price momentum. This is tempered by pressured profitability versus historical levels and a valuation that screens expensive for the current growth profile, while the latest earnings call was moderately supportive due to improving margin/cash-flow outlook despite retail and tariff risks.

Positive Factors

Balance sheet strength

Sustained low-to-moderate leverage and expanding equity provide durable financial flexibility. This balance-sheet strength supports the company's buy-and-build strategy, funds working capital needs, and reduces refinancing risk, enabling stable operations and M&A over the next several quarters.

Cash flow generation & inventory optimization

Improved operating cash flow and meaningful inventory reductions materially free working capital and strengthen self-funding. Durable cash conversion supports dividends, targeted ~$100M annual M&A and maintenance CapEx, lowering reliance on external financing over the medium term.

Acquisition-led growth and U.S. expansion

A repeatable M&A cadence and expanding U.S. footprint deepen distribution, broaden SKUs, and create cross-sell opportunities. Structural scale benefits (purchasing, logistics, distribution centers) can sustain revenue growth and incrementally improve margins if integration is executed.

Negative Factors

Margin compression

Persistently lower gross and net margins reduce earnings durability and limit reinvestment capacity. Structural margin compression makes profitability more sensitive to input cost swings, tariff moves, and acquisition mix, raising the bar for operational improvements to restore past returns.

Acquisition integration risk

While M&A drives scale, integration challenges can persist for multiple quarters, creating margin drag and execution risk. Repeated acquisitions demand consistent processes and capital; failure to capture synergies would impair the long-term case for growth through buy-and-build activity.

Tariff and retail-channel exposure

Persistent tariff uncertainty and retail demand variability are structural risks for a distributor reliant on imported components and renovation retailers. Tariffs can raise customer costs, compress margins, and disrupt cross-border customers for multiple quarters, limiting earnings visibility.

Richelieu Hardware Business Overview & Revenue Model

Company Description

Richelieu Hardware Ltd. manufactures, imports, and distributes specialty hardware and complementary products in North America. The company's principal product categories include furniture, glass and building decorative and functional hardware, lighting systems, finishing and decorating products, ergonomic workstation components, kitchen and closet storage solutions, sliding door systems, decorative and functional panels, high-pressure laminates, railing and balusters, and floor protection products, as well as accessories for power tools. It also manufactures veneer sheets and edge banding products; and various decorative moldings and components for the window and door industry. The company serves kitchen and bathroom cabinet, storage and closet, home furnishing, and office furniture manufacturers; door and window manufacturers; residential and commercial woodworkers; and hardware retailers, such as renovation superstores. The company was incorporated in 1968 and is headquartered in Montreal, Canada.

How the Company Makes Money

Richelieu Hardware generates revenue primarily through the sale of specialty hardware products and related services. The company's revenue model is based on a wholesale distribution approach, where it purchases products from manufacturers and sells them to retailers, contractors, and industrial clients at a markup. Key revenue streams include direct sales from its extensive product catalog, custom orders, and value-added services such as product sourcing and technical support. Additionally, Richelieu's strategic partnerships with leading manufacturers enable it to maintain a diverse product offering, while its robust logistics network ensures timely delivery, enhancing customer satisfaction and loyalty. The company's focus on innovation and expanding its product line further contributes to its earnings by attracting new customers and retaining existing ones.

Richelieu Hardware Financial Statement Overview

Summary

Balance sheet strength and manageable leverage support stability, and cash flow rebounded strongly in the latest year. The main offset is margin compression versus prior peaks and some historical cash-flow volatility, which reduces earnings quality/consistency.

Income Statement

Revenue has grown over time (strong step-up since 2020), but the most recent year shows only modest growth versus 2024. Profitability has clearly compressed: net margin fell from ~9–10% in 2021–2022 to ~4–6% in 2023–2024, and the latest gross margin is unusually low versus prior years, which is a key red flag for earnings quality/consistency. Net income is roughly flat versus 2024 and below the 2022 peak, signaling weaker operating leverage and less resilient margins.

Balance Sheet

Leverage is moderate and stable, with debt-to-equity staying around ~0.23–0.32 over the period and ~0.29 in 2025, which is generally manageable. Equity and assets have expanded steadily, supporting balance-sheet durability. Returns on equity have normalized from very strong 2021–2022 levels to ~9% recently, indicating reduced profitability but not balance-sheet stress.

Cash Flow

Cash generation is generally solid, with free cash flow positive in most years and a strong rebound in 2025 (free cash flow up materially versus 2024). Cash flow has been more volatile than earnings—2022 was notably weak/negative on both operating and free cash flow—so consistency is the main concern. In the latest year, free cash flow is slightly below net income (still close), suggesting earnings are reasonably backed by cash, while cash flow relative to revenue improved versus 2024.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.96B	1.83B	1.79B	1.80B	1.44B
Gross Profit	138.03M	450.32M	184.33M	507.25M	409.55M
EBITDA	213.88M	201.42M	230.40M	287.44M	234.40M
Net Income	85.82M	85.75M	111.47M	168.39M	141.76M
Balance Sheet
Total Assets	1.44B	1.39B	1.31B	1.28B	964.18M
Cash, Cash Equivalents and Short-Term Investments	45.52M	41.39M	46.33M	21.22M	58.71M
Total Debt	276.91M	264.60M	209.29M	264.13M	99.49M
Total Liabilities	479.24M	465.13M	406.81M	464.04M	295.24M
Stockholders Equity	961.94M	926.51M	904.89M	817.16M	666.44M
Cash Flow
Free Cash Flow	183.93M	103.00M	228.56M	-58.75M	87.35M
Operating Cash Flow	199.14M	133.56M	270.66M	-36.17M	104.41M
Investing Cash Flow	-62.27M	-50.84M	-61.79M	-66.83M	-66.49M
Financing Cash Flow	-101.13M	-117.87M	-72.36M	-66.64M	-53.69M

Richelieu Hardware Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 40.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCH, the sentiment is Positive. The current price of 40.97 is above the 20-day moving average (MA) of 40.63, above the 50-day MA of 39.13, and above the 200-day MA of 35.95, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 74.84 is Negative, neither overbought nor oversold. The STOCH value of 74.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RCH.

Richelieu Hardware Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNF	81 Outperform	C$1.96B	11.17	15.07%	3.11%	1.99%	31.36%
WPK	77 Outperform	C$2.68B	14.36	10.45%	7.11%	3.19%	-0.26%
TCL.A	74 Outperform	C$1.91B	11.19	8.95%	8.32%	-2.45%	44.20%
RCH	70 Outperform	C$2.35B	27.63	9.00%	1.53%	6.61%	-4.81%
TCL.B	70 Neutral	C$1.91B	11.48	8.95%	8.22%	-2.45%	44.20%
TOY	68 Neutral	C$1.90B	24.38	6.75%	2.40%	3.71%	80.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Richelieu Hardware Corporate Events

Richelieu Hardware Marks 100th Acquisition on Back of Strong 2025 Results

Richelieu Hardware reported solid results for its fourth quarter and 2025 fiscal year, with quarterly sales up 7.3% to $510.9 million and full-year sales rising 7.2% to $1.96 billion, supported by both internal growth and acquisitions. Profitability remained robust, with EBITDA increasing to $59.2 million in the quarter and $213.9 million for the year, and net earnings edging higher to $85.8 million for 2025, while strong operating cash flows of more than $200 million and a healthy working capital position underscore the company’s financial strength. The group sustained an aggressive acquisition program, completing ten deals over thirteen months—its 100th in company history—including Ideal Security, Klassen Bronze, Finmac Lumber and three McKillican American distribution centres, adding about $100 million in annual sales and expanding its geographic footprint in Canada and the U.S. These acquisitions materially deepen Richelieu’s presence in the hardware retailers and renovation superstores segment and broaden its private-brand portfolio to ten brands, reinforcing its strategic push to act as a comprehensive supplier for customers and supporting the board’s decision to raise the quarterly dividend for early 2026.

The most recent analyst rating on (TSE:RCH) stock is a Buy with a C$43.00 price target. To see the full list of analyst forecasts on Richelieu Hardware stock, see the TSE:RCH Stock Forecast page.