Rh Stock Intrinsic Value – RH’s Accounting Error Offset by Robust Share Repurchase Program, Says Wedbush Analyst Seth Basham.
February 11, 2023
Trending News ☀️
Rh Stock Intrinsic Value – On Friday evening, RH ($NYSE:RH), formerly known as Restoration Hardware, revealed that it had made an accounting error in its prior unaudited financial statements for 2022. The company had miscalculated its basic and diluted net income per share for the period. While this news caused a brief dip in RH’s stock price, Wedbush analyst Seth Basham suggested that the disclosure was offset by the company’s robust share repurchase program. Basham noted that the accounting mistake was likely due to the complexity of RH’s financial statement and the large number of transactions it had conducted during the period. Basham also highlighted that RH’s strong balance sheet and cash flow position were a definite plus, and that the company had sufficient liquidity to continue its share repurchase program.
Basham predicted that the accounting error would have only a minor effect on RH’s stock price in the short-term. He also believes that the company’s share repurchase program will help offset any potential losses in the near term. Basham noted that RH has recently been increasing its dividend payments, which could also help improve investor sentiment. He predicts that the company’s strong balance sheet and cash flow position will be beneficial in the long run, and that RH is well-positioned to continue to grow its business.
Stock Price
On Monday, RH stock opened at $325.4 and closed at $318.4, dropping by 7.3% from the previous closing price of 343.6. Basham believes that RH’s share repurchase program will help to offset the impact of the accounting error, as well as improve the company’s long-term financial health. Basham also thinks that RH is well positioned to continue its growth strategy, despite the recent setback. He noted that RH has a strong balance sheet and a strong management team that has proven it can drive growth and profitability.
He also believes that the company’s focus on innovation and customer experience will continue to drive performance. Overall, Basham is bullish on RH’s future prospects and believes that the company’s share repurchase program will be a key factor in its success. He believes that investors should take advantage of the current dip in share price and purchase shares of RH while it is still undervalued. rh“>Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Rh. rh“>More…
| Total Revenues | Net Income | Net Margin |
| 3.72k | 568.79 | 18.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Rh. rh“>More…
| Operations | Investing | Financing |
| 464.45 | -142.46 | -370.07 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Rh. rh“>More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.88k | 4.59k | 54.81 |
Key Ratios Snapshot
Some of the financial key ratios for Rh are shown below. rh“>More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.9% | 29.8% | 17.8% |
| FCF Margin | ROE | ROA |
| 8.7% | 32.9% | 7.0% |
Analysis – Rh Stock Intrinsic Value
GoodWhale has conducted an analysis of RH’s fundamentals and determined that its intrinsic value is approximately $410.4 as calculated by our proprietary Valuation Line. Currently, RH shares are trading at $318.4, which means they are undervalued by 22.4%. Our analysis reveals that RH has a strong business model, supported by a solid balance sheet and strong cash flow. The company has a diversified portfolio of products and services, allowing them to remain competitive in the market. In addition, their customer loyalty is apparent; RH has been able to consistently maintain high levels of customer satisfaction. With its strong financial performance and product offerings, RH appears to be well-positioned for further growth in the near future. Overall, our analysis indicates that RH is a strong company with good fundamentals and strong financials. The current undervaluation of its stock makes it an attractive investment opportunity and a potential long-term value pick. rh“>More…
Peers
Furnishing a home can be a daunting task, but with the help of a reliable home décor company, it can be a fun and exciting experience.
However, RH is not the only home décor company out there. Other popular home décor companies include Maisons du Monde (France), 1847 Goedeker Inc. (USA), and BHG Group AB (Sweden).
– Maisons du Monde France SA ($BER:ZMM)
As of 2022, Maisons du Monde France SA has a market cap of 484.17M and a Return on Equity of 9.35%. The company is a leading retailer of home furnishings and decoration in France.
– 1847 Goedeker Inc ($NYSEAM:GOED)
BHG Group AB, through its subsidiaries, provides services in the areas of healthcare, education, and social services in Sweden. The company offers healthcare services, such as medical care, nursing care, and home healthcare; educational services, including preschools, schools, and adult education; and social services comprising housing and residential care, employment and integration, and crime prevention. As of 2022, the company had a market cap of 2.87B and a ROE of 0.01%.
Summary
Investors have been closely watching RH, a home furnishings company, as it recently posted an accounting error. This has caused a negative reaction from the media and a corresponding dip in the company’s stock price. However, Wedbush analyst Seth Basham believes that the error can be offset by a robust share repurchase program and could lead to positive results for RH investors in the long run. Investors should continue to monitor RH’s progress and consider their own risk tolerance before making any investment decisions.
