At Home Group (NYSE: HOME) and Restoration Hardware (NYSE:RH) are both home furnishings retailers – nec companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

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%
Restoration Hardware 0.45% 14.77% 3.71%

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. 7.1% of At Home Group shares are held by insiders. Comparatively, 18.8% of Restoration Hardware shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for At Home Group and Restoration Hardware, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
At Home Group 0 2 5 0 2.71
Restoration Hardware 1 12 5 0 2.22

At Home Group presently has a consensus price target of $27.50, suggesting a potential upside of 11.34%. Restoration Hardware has a consensus price target of $81.49, suggesting a potential downside of 22.96%. Given At Home Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe At Home Group is more favorable than Restoration Hardware.

Valuation and Earnings

This table compares At Home Group and Restoration Hardware’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
At Home Group $765.64 million 1.95 $27.06 million $0.60 41.17
Restoration Hardware $2.13 billion 1.05 $5.40 million $0.40 264.46

At Home Group has higher earnings, but lower revenue than Restoration Hardware. At Home Group is trading at a lower price-to-earnings ratio than Restoration Hardware, indicating that it is currently the more affordable of the two stocks.

At Home Group Company Profile

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.

Restoration Hardware Company Profile

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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