RH's gross profit margin for the third quarter of its fiscal year 2023 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the subsector, the revenue growth did not. RH has weak liquidity. Currently, the Quick Ratio is 0.52 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
At the same time, stockholders' equity ("net worth") has significantly decreased by 125.75% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.TheStreetRatings.com.
Income Statement | Q3 FY23 | Q3 FY22 |
---|---|---|
Net Sales ($mil) | 751.23 | 869.07 |
EBITDA ($mil) | 78.11 | 193.32 |
EBIT ($mil) | 49.66 | 165.29 |
Net Income ($mil) | -2.19 | 98.76 |
Balance Sheet | Q3 FY23 | Q3 FY22 |
---|---|---|
Cash & Equiv. ($mil) | 382.66 | 2154.35 |
Total Assets ($mil) | 4240.62 | 5883.72 |
Total Debt ($mil) | 3797.87 | 3770.25 |
Equity ($mil) | -333.21 | 1293.95 |
Profitability | Q3 FY23 | Q3 FY22 |
---|---|---|
Gross Profit Margin | 49.11 | 51.64 |
EBITDA Margin | 10.39 | 22.24 |
Operating Margin | 6.61 | 19.02 |
Sales Turnover | 0.72 | 0.63 |
Return on Assets | 5.26 | 9.66 |
Return on Equity | 0.0 | 43.96 |
Debt | Q3 FY23 | Q3 FY22 |
---|---|---|
Current Ratio | 1.38 | 3.49 |
Debt/Capital | 1.1 | 0.74 |
Interest Expense | 61.29 | 44.78 |
Interest Coverage | 0.81 | 3.69 |
Share Data | Q3 FY23 | Q3 FY22 |
---|---|---|
Shares outstanding (mil) | 18.22 | 23.61 |
Div / share | 0.0 | 0.0 |
EPS | -0.12 | 3.78 |
Book value / share | -18.29 | 54.81 |
Institutional Own % | n/a | n/a |
Avg Daily Volume | 486736.0 | 831703.0 |
HOLD. The current P/E ratio indicates a significant premium compared to an average of 15.23 for the Furniture, Home Furnishings, Electronics, Apl Reta subsector and a premium compared to the S&P 500 average of 27.95. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well below the S&P 500 average, but well above the subsector average. Upon assessment of these and other key valuation criteria, RH seems to be trading at a premium to investment alternatives.
Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
RH 31.69 | Peers 15.23 | RH 13.61 | Peers 8.10 | |||||||||||||||||||||
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations. RH is trading at a significant premium to its peers. |
Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. RH is trading at a significant premium to its peers. |
|||||||||||||||||||||||
Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
RH 25.32 | Peers 12.00 | RH NM | Peers 2.19 | |||||||||||||||||||||
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations. RH is trading at a significant premium to its peers. |
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. RH's negative PEG ratio makes this valuation measure meaningless. |
|||||||||||||||||||||||
Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
RH NM | Peers 3.23 | RH -54.97 | Peers 875.23 | |||||||||||||||||||||
Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. RH's P/B is negative making this valuation measure meaningless. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, RH is expected to significantly trail its peers on the basis of its earnings growth rate. |
|||||||||||||||||||||||
Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
RH 1.74 | Peers 0.71 | RH -17.65 | Peers 0.85 | |||||||||||||||||||||
Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. RH is trading at a significant premium to its subsector. |
Lower. A sales growth rate that trails the subsector implies that a company is losing market share. RH significantly trails its peers on the basis of sales growth. |
|||||||||||||||||||||||