Contrasting At Home Group (HOME) & Restoration Hardware (RH)

At Home Group (NYSE: HOME) and Restoration Hardware (NYSE:RH) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices 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
Restoration Hardware 1 12 4 0 2.18

At Home Group presently has a consensus price target of $27.50, indicating a potential downside of 4.55%. Restoration Hardware has a consensus price target of $81.49, indicating a potential downside of 17.39%. Given At Home Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe At Home Group is more favorable than Restoration Hardware.

Valuation & Earnings

This table compares At Home Group and Restoration Hardware’s 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 2.28 $27.06 million $0.60 48.02
Restoration Hardware $2.13 billion 0.98 $5.40 million $0.42 234.88

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.

Insider & Institutional Ownership

24.7% 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 company insiders. Comparatively, 18.8% of Restoration Hardware shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

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% 20.04% 3.80%

Summary

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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