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RH: New Gallery Openings Will Support Stronger Profitability Ahead

Global Gallery Expansion Will Capitalize On Affluent Home Trends

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RH
AnalystHighTarget
Not Invested
Published 26 Apr 2025

Update shared on 12 Dec 2025

Fair value Decreased 11%
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AnalystHighTarget's Fair Value
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1Y
-59.3%
7D
6.0%

Analysts have reduced their price target on RH to approximately $365 from about $412, citing slightly slower expected revenue growth, a higher discount rate, and a modestly lower future earnings multiple, partially offset by a small improvement in projected profit margins.

What's in the News

  • Opened RH Detroit, The Gallery in Birmingham, a four level, 60,000 square foot immersive space that combines residential design, retail, indoor and outdoor areas, and hospitality elements (company announcement)
  • Launched RH Manhasset, The Gallery at Americana, a three level, 19,000 square foot gallery that integrates luxury home furnishings with curated art, antiques, and artifacts from around the world (company announcement)

Valuation Changes

  • The fair value estimate has fallen moderately to approximately $365 from about $412, reflecting a more conservative outlook.
  • The discount rate has risen meaningfully to about 12.2 percent from roughly 10.3 percent, implying a higher required return on capital.
  • Revenue growth has eased modestly to around 11.8 percent from about 13.5 percent, indicating slightly slower expected top line expansion.
  • The net profit margin has risen slightly to roughly 10.9 percent from about 10.5 percent, suggesting a small improvement in expected profitability.
  • The future P/E multiple has declined moderately to about 19.3x from roughly 21.4x, indicating a somewhat lower valuation multiple on projected earnings.

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Disclaimer

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