RH (RH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RH - US74967X1037 - Common Stock
208.87 USD
-0.94 (-0.45%)
We assign a fundamental rating of 4 out of 10 to RH. RH was compared to 122 industry peers in the Specialty Retail industry. There are concerns on the financial health of RH while its profitability can be described as average. RH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year RH was profitable.
- In the past year RH had a positive cash flow from operations.
- Each year in the past 5 years RH has been profitable.
- RH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- RH has a Return On Assets (2.29%) which is in line with its industry peers.
- RH has a better Return On Equity (3285.39%) than 100.00% of its industry peers.
- RH has a Return On Invested Capital of 8.26%. This is in the better half of the industry: RH outperforms 68.85% of its industry peers.
- RH had an Average Return On Invested Capital over the past 3 years of 10.73%. This is in line with the industry average of 12.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.29% | ||
| ROE | 3285.39% | ||
| ROIC | 8.26% |
ROA(3y)4.87%
ROA(5y)7.29%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)10.73%
ROIC(5y)14.31%
1.3 Margins
- RH's Profit Margin of 3.22% is fine compared to the rest of the industry. RH outperforms 69.67% of its industry peers.
- RH's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 10.49%, RH belongs to the top of the industry, outperforming 84.43% of the companies in the same industry.
- RH's Operating Margin has declined in the last couple of years.
- RH has a Gross Margin of 44.50%. This is in the better half of the industry: RH outperforms 70.49% of its industry peers.
- RH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.49% | ||
| PM (TTM) | 3.22% | ||
| GM | 44.5% |
OM growth 3Y-26.37%
OM growth 5Y-6.4%
PM growth 3Y-50.1%
PM growth 5Y-22.84%
GM growth 3Y-3.41%
GM growth 5Y1.47%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RH is still creating some value.
- RH has more shares outstanding than it did 1 year ago.
- RH has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for RH has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.37, we must say that RH is in the distress zone and has some risk of bankruptcy.
- RH has a Altman-Z score of 1.37. This is in the lower half of the industry: RH underperforms 65.57% of its industry peers.
- The Debt to FCF ratio of RH is 25.66, which is on the high side as it means it would take RH, 25.66 years of fcf income to pay off all of its debts.
- RH's Debt to FCF ratio of 25.66 is in line compared to the rest of the industry. RH outperforms 46.72% of its industry peers.
- A Debt/Equity ratio of 944.39 is on the high side and indicates that RH has dependencies on debt financing.
- RH has a worse Debt to Equity ratio (944.39) than 81.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 944.39 | ||
| Debt/FCF | 25.66 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.8
WACC10.28%
2.3 Liquidity
- RH has a Current Ratio of 1.19. This is a normal value and indicates that RH is financially healthy and should not expect problems in meeting its short term obligations.
- RH has a Current ratio of 1.19. This is in the lower half of the industry: RH underperforms 61.48% of its industry peers.
- A Quick Ratio of 0.26 indicates that RH may have some problems paying its short term obligations.
- RH has a worse Quick ratio (0.26) than 80.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 41.43% over the past year.
- Measured over the past years, RH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -14.46% on average per year.
- Looking at the last year, RH shows a quite strong growth in Revenue. The Revenue has grown by 9.74% in the last year.
- The Revenue has been growing slightly by 3.74% on average over the past years.
EPS 1Y (TTM)41.43%
EPS 3Y-41.01%
EPS 5Y-14.46%
EPS Q2Q%-31.05%
Revenue 1Y (TTM)9.74%
Revenue growth 3Y-5.41%
Revenue growth 5Y3.74%
Sales Q2Q%8.88%
3.2 Future
- Based on estimates for the next years, RH will show a very strong growth in Earnings Per Share. The EPS will grow by 45.55% on average per year.
- The Revenue is expected to grow by 8.19% on average over the next years. This is quite good.
EPS Next Y36.4%
EPS Next 2Y41.7%
EPS Next 3Y39.79%
EPS Next 5Y45.55%
Revenue Next Year8.46%
Revenue Next 2Y8.69%
Revenue Next 3Y8.43%
Revenue Next 5Y8.19%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- RH is valuated quite expensively with a Price/Earnings ratio of 32.89.
- RH's Price/Earnings is on the same level as the industry average.
- RH's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.82.
- RH is valuated rather expensively with a Price/Forward Earnings ratio of 19.44.
- RH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RH is cheaper than 65.57% of the companies in the same industry.
- RH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.89 | ||
| Fwd PE | 19.44 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RH is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of RH is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.34 | ||
| EV/EBITDA | 14.19 |
4.3 Compensation for Growth
- RH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- RH has a very decent profitability rating, which may justify a higher PE ratio.
- RH's earnings are expected to grow with 39.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.9
PEG (5Y)N/A
EPS Next 2Y41.7%
EPS Next 3Y39.79%
5. Dividend
5.1 Amount
- RH does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
RH / RH FAQ
Can you provide the ChartMill fundamental rating for RH?
ChartMill assigns a fundamental rating of 4 / 10 to RH.
Can you provide the valuation status for RH?
ChartMill assigns a valuation rating of 5 / 10 to RH (RH). This can be considered as Fairly Valued.
Can you provide the profitability details for RH?
RH (RH) has a profitability rating of 6 / 10.
What is the valuation of RH based on its PE and PB ratios?
The Price/Earnings (PE) ratio for RH (RH) is 32.89 and the Price/Book (PB) ratio is 1170.45.