Three Reasons Why RH is Risky and One Stock to Buy Instead

StockStory02:32

Three Reasons Why RH is Risky and One Stock to Buy Instead The past six months have been a windfall for RH’s shareholders. The company’s stock price has jumped 55.8%, hitting $390.43 per share. ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2486705694?lang=en_US&edition=fundamental","thumbnail":"https://s.yimg.com/uu/api/res/1.2/K6QXcxLdSZBdt9D_emdw3A--~B/aD03MDA7dz0xNDAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/stockstory_922/f2b28af9977cdafc6d33ca8ac20ae09a","is_english":true,"pubTime":"2024-11-26 02:32","share_image_url":"https://static.laohu8.com/5f26f4a48f9cb3e29be4d71d3ba8c038","id":"2486705694","market":"us","top_or_hot":-1,"title":"Three Reasons Why RH is Risky and One Stock to Buy Instead","media":"StockStory","content":"<div>\n<p>Three Reasons Why RH is Risky and One Stock to Buy Instead \n \n\nThe past six months have been a windfall for RH’s shareholders. The company’s stock price has jumped 55.8%, hitting $390.43 per share. ...</p>\n\n<a href=\"https://finance.yahoo.com/news/three-reasons-why-rh-risky-183249649.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Three Reasons Why RH is Risky and One Stock to Buy Instead</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThree Reasons Why RH is Risky and One Stock to Buy Instead\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-26 02:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/three-reasons-why-rh-risky-183249649.html><strong>StockStory</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Three Reasons Why RH is Risky and One Stock to Buy Instead \n \n\nThe past six months have been a windfall for RH’s shareholders. The company’s stock price has jumped 55.8%, hitting $390.43 per share. ...</p>\n\n<a href=\"https://finance.yahoo.com/news/three-reasons-why-rh-risky-183249649.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4585","symbol_name":"ETF&股票定投概念","start_time":0,"source_url":"https://finance.yahoo.com/news/three-reasons-why-rh-risky-183249649.html","article_id":"2486705694","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/K6QXcxLdSZBdt9D_emdw3A--~B/aD03MDA7dz0xNDAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/stockstory_922/f2b28af9977cdafc6d33ca8ac20ae09a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2486705694","pubTimestamp":1732559569,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The past six months have been a windfall for RH’s shareholders. The company’s stock price has jumped 55.8%, hitting $390.43 per share. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.Is there a buying opportunity in RH, or does it present a risk to your portfolio?Check out our in-depth research report to see what our analysts have to say, it’s free.Despite the momentum, we're cautious about RH. Here are three reasons why we avoid RH and a stock we'd rather own.Formerly known as Restoration Hardware, RH  is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.Same-store sales show the change in sales for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. This is a key performance indicator because it measures organic growth.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4559":"巴菲特持仓","BK4588":"碎股","RH":"Restoration Hardware Holdings","BK4178":"家庭装饰零售"},"translate_title":"RH有风险的三个原因以及值得购买的一只股票","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RH":1},"content_text":"Three Reasons Why RH is Risky and One Stock to Buy Instead \n \n\nThe past six months have been a windfall for RH’s shareholders. The company’s stock price has jumped 55.8%, hitting $390.43 per share. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move. \nIs there a buying opportunity in RH, or does it present a risk to your portfolio? \nCheck out our in-depth research report to see what our analysts have to say, it’s free. \nDespite the momentum, we're cautious about RH. Here are three reasons why we avoid RH and a stock we'd rather own. \nWhy Is RH Not Exciting?\nFormerly known as Restoration Hardware, RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.\n1. Declining Same-Store Sales Indicate Evaporating Demand\nSame-store sales show the change in sales for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. This is a key performance indicator because it measures organic growth. \nRH’s demand has been shrinking over the last two years as its same-store sales have averaged 10.1% annual declines. \n\n2. Free Cash Flow Margin Dropping\nIf you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills. \nAs you can see below, RH’s margin dropped by 17.6 percentage points over the last year. This decrease warrants extra caution because RH failed to grow its same-store sales. Its cash profitability could decay further if it tries to reignite growth by opening new stores. RH’s free cash flow margin for the trailing 12 months was negative 9.3%. \n\n3. Short Runway Exposes Shareholders to Potential Dilution\nAs long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by. \nRH burned through $281.9 million of cash over the last year, and its $3.71 billion of debt exceeds the $78.33 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble. \n\nUnless the company’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns. We remain cautious of RH until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet. \nFinal Judgment\nRH isn’t a terrible business, but it isn’t one of our picks. Following the recent surge, the stock trades at 34.1x forward price-to-earnings (or $390.43 per share). At this valuation, there’s a lot of good news priced in - we think there are better investment opportunities out there. Let us point you toward The Trade Desk, the nucleus of digital advertising. \nStocks We Would Buy Instead of RH\nWith rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle. \nPut yourself in the driver’s seat by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. \nStocks that made our list in 2019 include now familiar names such as Nvidia (+2,691% between September 2019 and September 2024) as well as under-the-radar businesses like United Rentals (+550% five-year return). Find your next big winner with StockStory today for free.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2486705694"}