Over the past three months, the stock price of RH (RH, Financial), a luxury retailer in the cyclical retail industry, has seen a significant increase of 29.99%. The current stock price stands at $347.96, up from $259.36 three months ago. This price change has resulted in a market cap of $6.4 billion. Despite a slight dip of 10.70% over the past week, the overall upward trend in the stock price is noteworthy.
When comparing the current GF Value of $404.35 with the past GF Value of $416.92, it is evident that the stock is currently modestly undervalued. This is a shift from three months ago when the stock was significantly undervalued. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates.
Company Overview
RH operates in the $143 billion domestic furniture and home furnishing industry. The company offers a wide range of products across various categories including furniture, lighting, textiles, bath, decor, and children's items. In addition to its retail offerings, RH is also growing its hospitality business with 15 restaurant locations. The company is fully integrated across store, web, and catalog channels and is positioned to broaden its total addressable market over the next decade with its World of RH digital platform. This platform highlights offerings outside of home furnishings, along with future offerings in color, antique, bespoke furniture, and more.
Profitability Analysis
With a Profitability Rank of 8/10, RH's profitability is better than 71.03% of the 1046 companies in the same industry. The company's operating margin of 18.27% is better than 91.4% of the 1093 companies in the same sector. This indicates that RH has been successful in maintaining a high level of profitability.
Furthermore, the company's ROE, ROA, and ROIC are 33.74%, 6.55%, and 14.33% respectively. These figures are better than the majority of the companies in the same industry, indicating that RH has been efficient in generating profits and managing its assets and investments. Over the past 10 years, the company has maintained profitability for 9 years, further emphasizing its strong financial performance.
Growth Prospects
RH's Growth Rank of 8/10 indicates that the company has a strong growth potential. The 3-year and 5-year revenue growth rate per share are 7.50% and 8.10% respectively, which are better than the majority of the companies in the same industry. However, the future total revenue growth rate is estimated to be -2.12%, which is better than only 8.2% of the 244 companies in the same sector.
The 3-year EPS without NRI growth rate is 29.90%, which is better than 73.52% of the 827 companies in the same industry. The future EPS without NRI growth rate is estimated to be 8.47%, which is better than 30% of the 60 companies in the same sector. These figures indicate that RH has a strong growth potential.
Top Holders
Steve Mandel (Trades, Portfolio) is the top holder of RH's stock with 1,773,069 shares, accounting for 9.64% of the total shares. Steven Cohen (Trades, Portfolio) and Ron Baron (Trades, Portfolio) follow with 255,449 shares (1.39%) and 66,720 shares (0.36%) respectively.
Competitor Analysis
RH faces competition from GameStop Corp (GME, Financial) with a market cap of $5.2 billion, MINISO Group Holding Ltd (MNSO, Financial) with a market cap of $7.18 billion, and Murphy USA Inc (MUSA, Financial) with a market cap of $6.65 billion. These companies are in the same industry and have a similar market capitalization.
Conclusion
In conclusion, RH has demonstrated strong performance over the past three months with a significant increase in its stock price. The company's profitability and growth potential are promising, and it has a strong presence in the market with a high market cap. Despite facing competition from other companies in the same industry, RH's strong financial performance and growth prospects make it a compelling choice for investors.
