RH Class A RH

Morningstar Rating
$120.46 −0.05 (0.04%)
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Company Report

Moderating Investments in European Buildout Position RH to Capture Rising Profit Margins Ahead

RH has gained share in the fragmented $136 billion (per US Census) domestic furniture and home furnishing market in recent years, curating differentiated offerings from global artisans. It has broadened its brand awareness by expanding into underserved categories, including modern, estates, and hospitality, where few peers nationally compete, leading to incremental market share gains from boutique competitors. Brand equity should improve as the store buildouts accelerate, category expansions launch, loyalty remains compelling, and pricing remains consistent. However, the diverse end-market expansions that RH is pursuing could make it tough to gain a competitive edge. Still, opportunities in product line expansions, international markets, and the $200 billion hotel industry should support 8% top-line growth longer term.

Price vs Fair Value

RH is trading at a LOCK|lSjB%> premium.
Price
$120.46
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
MLP
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

RH continues to transform its retail footprint in North America. As new product lines are introduced (estates, for example) into an evolving footprint, sales to a broader addressable market could rise faster than we anticipate.

Bears

Low customer switching costs, along with the proliferation of e-commerce and mass-merchant competitors, could pressure operating margin expansion. High-end discounters could affect RH's market share.

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Trading Information

Previous Close Price
$120.51
Day Range
$120.00–124.41
52-Week Range
$106.30–239.40
Bid/Ask
$120.50 / $120.95
Shares Outstanding
18.93M
Market Cap
$2.28B
Volume/Avg
783,411 / 765,873

Key Statistics

Price/Earnings (Normalized)
29.69
Price/Sales
0.69
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Dividend Payment Schedule
—
Total Yield
—

Company Profile

RH is a luxury furniture and lifestyle retailer primarily operating in the $136 billion domestic furniture and home furnishing industry. The firm offers merchandise across many categories, including furniture, lighting, textiles, bath, decor, and has a growing presence in hospitality with 27 restaurant locations, including RH Guesthouse. RH innovates, curates, and integrates products, categories, services, and businesses across design subcategories (RH Estates and Waterworks, for example), and has recently broadened its addressable market via expansion abroad (currently, less than 10% of sales) and its World of RH digital platform (highlighting offerings outside of home furnishings).
Sector
Consumer Cyclical
Industry
Specialty Retail
Stock Style Box
Small Core
Total Number of Employees
7,230

Competitors

Valuation

Metric
RH
WSM
W
Price/Earnings (Normalized)
29.6925.7636.73
Price/Book Value
18.9512.84—
Price/Sales
0.693.521.02
Price/Cash Flow
4.6615.5722.60
Price/Earnings
RH
WSM
W

Financial Strength

Metric
RH
WSM
W
Quick Ratio
0.260.620.59
Current Ratio
1.121.450.74
Interest Coverage
1.58—−1.16
Quick Ratio
RH
WSM
W

Profitability

Metric
RH
WSM
W
Return on Assets (Normalized)
1.64%24.01%13.42%
Return on Equity (Normalized)
199.65%61.76%—
Return on Invested Capital (Normalized)
5.87%35.28%55.01%
Return on Assets
RH
WSM
W

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