RH (RH) Stock Forecast & Price Target

RH has demonstrated strong performance, with third-quarter revenues rising 8.9% to $884 million, surpassing both internal estimates and consensus forecasts. This growth followed a successful expansion of its core business, restaurants, and outlets, as well as a noteworthy gross margin increase of 79 basis points, signaling effective management of cost pressures stemming from tariffs. Additionally, the company's increasing global presence, particularly in key markets like Paris, along with its strategic focus on diversifying offerings through the World of RH digital platform, positions it favorably for sustained growth and market share gains in the luxury home furnishings sector.

RH is facing a decline in capital expenditures, projected to decrease from a range of $275 million-$325 million in 2025 to $150 million-$200 million by 2027, which raises concerns about the company's future growth potential. The firm reported a contraction in operating margin to 11.6%, falling short of both its guidance and industry benchmarks, coupled with an estimated $686 million in EBITDA for FY25, representing a downward revision from previous estimates due to weaker revenue performance and tariff-related impacts. Moreover, RH has lowered its 2025 revenue and profit guidance, projecting an EPS drop to $10.15 from a prior forecast of $12.35, which highlights a trend of diminishing financial performance and increasing uncertainty in revenue growth.