Is RH a Good Investment?

PHOTO CREDIT: RH

OVERVIEW

Why You Should?

  1. RH continues to see strong demand for many of its products during the holiday season. People purchase a lot of furniture products during the holiday season to give away as gifts or to renew their homes to host holiday gatherings. This consumer trend has continued this year and will benefit the company’s financial results. This will also benefit investors in the company.
  2. RH is a great reopening play as well. The company does sell luxury furniture products, and the company traditionally does not perform well during recessions. Once people start to have more disposable income, they will continue to invest in their homes and will buy more RH furniture. This will benefit the company and investors.
  3. Due to the reasons mentioned above, the company has seen rising revenues and profits over the past couple of financial years. This has helped the company grow across all of its markets and offer new products and solutions. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 2.65 billion and profits of around 220 million. Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 2.51 billion and profits of around 135 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. The COVID-19 pandemic has hurt some aspects of the company’s business. Office spaces no longer need furniture as everyone works from home. Furthermore, the company has seen some supply chain disruptions and higher costs associated with the pandemic. This has marginally hurt some of the company’s financial results.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.