NYSE:RH

Stock Analysis Report

Executive Summary

RH, together with its subsidiaries, operates as a retailer in the home furnishings.


Snowflake Analysis

Solid track record with moderate growth potential.


Similar Companies

Share Price & News

How has RH's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.7%

RH

0.9%

US Specialty Retail

-1.1%

US Market


1 Year Return

61.2%

RH

17.7%

US Specialty Retail

17.9%

US Market

Return vs Industry: RH exceeded the US Specialty Retail industry which returned 17.7% over the past year.

Return vs Market: RH exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

RHIndustryMarket
7 Day-0.7%0.9%-1.1%
30 Day6.9%2.7%1.4%
90 Day17.0%5.1%6.9%
1 Year61.2%61.2%19.5%17.7%20.3%17.9%
3 Year654.5%654.5%44.9%37.9%47.8%38.3%
5 Year168.4%168.4%48.1%36.1%71.9%53.0%

Price Volatility Vs. Market

How volatile is RH's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RH undervalued compared to its fair value and its price relative to the market?

28.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RH ($236.45) is trading below our estimate of fair value ($328.33)

Significantly Below Fair Value: RH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RH is poor value based on its PE Ratio (23.8x) compared to the Specialty Retail industry average (16.9x).

PE vs Market: RH is poor value based on its PE Ratio (23.8x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: RH is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: RH has negative assets, so we can't compare its PB Ratio to the US Specialty Retail industry average.


Next Steps

Future Growth

How is RH forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

18.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RH's forecast earnings growth (18.3% per year) is above the savings rate (1.7%).

Earnings vs Market: RH's earnings (18.3% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: RH's earnings are forecast to grow, but not significantly.

Revenue vs Market: RH's revenue (7.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: RH's revenue (7.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RH's Return on Equity is forecast to be very high in 3 years time (89.4%).


Next Steps

Past Performance

How has RH performed over the past 5 years?

16.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RH has high quality earnings.

Growing Profit Margin: RH's current net profit margins (7.3%) are higher than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: RH's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: RH's earnings growth over the past year (78.6%) exceeds its 5-year average (16.4% per year).

Earnings vs Industry: RH earnings growth over the past year (78.6%) exceeded the Specialty Retail industry 7.9%.


Return on Equity

High ROE: RH's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RH's financial position?


Financial Position Analysis

Short Term Liabilities: RH has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RH has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RH has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RH's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: RH's debt is well covered by operating cash flow (41.3%).

Interest Coverage: RH's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

Inventory Level: RH has a high level of physical assets or inventory.

Debt Coverage by Assets: RH has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is RH's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate RH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RH's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Gary Friedman (61yo)

6.1yrs

Tenure

US$3,943,757

Compensation

Mr. Gary G. Friedman has been the Chairman and Chief Executive Officer of Restoration Hardware Holdings, Inc. (now RH) since July 2, 2013 and January 31, 2014 respectively. Mr. Friedman is Founder of Hiera ...


CEO Compensation Analysis

Compensation vs Market: Gary's total compensation ($USD3.94M) is about average for companies of similar size in the US market ($USD4.87M).

Compensation vs Earnings: Gary's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gary Friedman
Chairman & CEO6.1yrsUS$3.94m9.76% $438.2m
Eri Chaya
President7.3yrsUS$4.83m0.29% $12.8m
DeMonty Price
President and Chief Operating3.8yrsUS$4.62m0.26% $11.5m
David Stanchak
President and Chief Real Estate & Development Officer2.3yrsUS$2.84m0.084% $3.8m
Jack Preston
Chief Financial Officer0.9yrsno data0.040% $1.8m
Glenda Citragno
Chief Accounting Officer & Principal Accounting Officer0.9yrsno datano data
Prakash Muppirala
CTO & President of Digital Innovations2.8yrsno datano data
Cammeron McLaughlin
Senior Vice President of Investor Relations & Strategy0yrsno datano data
Fernando Garcia
President of Furniture Operations & Home Delivery0yrsno datano data
Peter Sallick
CEO & Creative Director of Waterworks0yrsno datano data

2.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: RH's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gary Friedman
Chairman & CEO6.1yrsUS$3.94m9.76% $438.2m
Eri Chaya
President7.3yrsUS$4.83m0.29% $12.8m
Keith Belling
Director3.8yrsUS$257.98k0.053% $2.4m
Leonard Schlesinger
Independent Director5.8yrsUS$314.95k0.066% $3.0m
Mark Demilio
Lead Independent Director3.9yrsUS$386.43k0.22% $10.0m
Carlos Alberini
Independent Director9.7yrsUS$257.98k0.24% $10.7m
Hilary Krane
Independent Director3.7yrsUS$280.48k0.035% $1.6m
Kathleen Mitic
Independent Director6.3yrsUS$280.48k0.049% $2.2m
Ali Rowghani
Independent Director5.1yrsUS$272.98k0.042% $1.9m

5.8yrs

Average Tenure

61yo

Average Age

Experienced Board: RH's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RH insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

RH's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RH
  • Ticker: RH
  • Exchange: NYSE
  • Founded: 1979
  • Industry: Homefurnishing Retail
  • Sector: Retail
  • Market Cap: US$4.492b
  • Shares outstanding: 19.00m
  • Website: https://www.restorationhardware.com

Number of Employees


Location

  • RH
  • 15 Koch Road
  • Corte Madera
  • California
  • 94925
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RHNYSE (New York Stock Exchange)YesNew Common StockUSUSDNov 2012
RS1DB (Deutsche Boerse AG)YesNew Common StockDEEURNov 2012
RH *BMV (Bolsa Mexicana de Valores)YesNew Common StockMXMXNNov 2012
0KTFLSE (London Stock Exchange)YesNew Common StockGBUSDNov 2012

Biography

RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware, 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, restorationhardware.com, rhbabyandchild.com, rhteen.com, and rhmodern.com, as well as waterworks.com. As of February 2, 2019, it operated a total of 83 retail galleries consisting of 20 design galleries, 43 legacy Galleries, 2 RH Modern Galleries, and 6 RH Baby & Child Galleries throughout the United States and Canada; and 15 Waterworks showrooms in the United States and in the United kingdom, as well as operated 39 outlet stores throughout the United States and Canada. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 02:36
End of Day Share Price2020/02/21 00:00
Earnings2019/11/02
Annual Earnings2019/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.