At Home Group (HOME) versus Restoration Hardware (RH) Critical Analysis
At Home Group (NYSE: HOME) and Restoration Hardware (NYSE:RH) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.
Risk & Volatility
At Home Group has a beta of 3.84, meaning that its share price is 284% more volatile than the S&P 500. Comparatively, Restoration Hardware has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500.
Insider and Institutional Ownership
24.8% of At Home Group shares are held by institutional investors. Comparatively, 95.7% of Restoration Hardware shares are held by institutional investors. 7.3% of At Home Group shares are held by company insiders. Comparatively, 18.8% of Restoration Hardware shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for At Home Group and Restoration Hardware, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|At Home Group||0||2||5||0||2.71|
At Home Group currently has a consensus price target of $27.50, indicating a potential upside of 4.40%. Restoration Hardware has a consensus price target of $74.37, indicating a potential downside of 28.40%. Given At Home Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe At Home Group is more favorable than Restoration Hardware.
Earnings and Valuation
This table compares At Home Group and Restoration Hardware’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|At Home Group||$765.64 million||2.08||$27.06 million||$0.60||43.90|
|Restoration Hardware||$2.13 billion||1.03||$5.40 million||($0.08)||-1,298.38|
At Home Group has higher earnings, but lower revenue than Restoration Hardware. Restoration Hardware is trading at a lower price-to-earnings ratio than At Home Group, indicating that it is currently the more affordable of the two stocks.
This table compares At Home Group and Restoration Hardware’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|At Home Group||4.18%||7.53%||3.21%|
At Home Group beats Restoration Hardware on 8 of the 13 factors compared between the two stocks.
About At Home Group
At Home Group, Inc. is a home decor superstore. The Company is focused on providing a range of assortment of products for any room, in any style, for any budget. As of July 30, 2016, the Company offered over 50,000 stock keeping units (SKUs) throughout its stores. As of July 30, 2016, the Company’s store base is consisted of 115 format stores across 29 states and 65 markets, averaging approximately 120,000 square feet per store.
About Restoration Hardware
RH, formerly Restoration Hardware Holdings, Inc., is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, fittings, fixtures, surfaces, accessories and home decor. The Company’s business is integrated across its channels of distribution consisting of its stores, Source Books and Websites. The Company also owns a controlling interest in Design Investors WW Acquisition Company, LLC, which owns the business operating under the name ‘Waterworks’.
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