Reviewing At Home Group (HOME) & Restoration Hardware (NYSE:RH)

Restoration Hardware (NYSE: RH) and At Home Group (NYSE:HOME) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Analyst Ratings

This is a summary of current recommendations for Restoration Hardware and At Home Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Restoration Hardware 1 12 4 0 2.18
At Home Group 0 2 5 0 2.71

Restoration Hardware currently has a consensus target price of $81.49, indicating a potential downside of 9.22%. At Home Group has a consensus target price of $28.50, indicating a potential downside of 9.92%. Given Restoration Hardware’s higher possible upside, equities analysts clearly believe Restoration Hardware is more favorable than At Home Group.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Restoration Hardware $2.13 billion 0.90 $5.40 million $0.40 224.43
At Home Group $765.64 million 2.50 $27.06 million $0.60 52.73

At Home Group has lower revenue, but higher earnings 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.

Risk and Volatility

Restoration Hardware has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, At Home Group has a beta of 3.77, indicating that its stock price is 277% more volatile than the S&P 500.

Profitability

This table compares Restoration Hardware and At Home Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Restoration Hardware 0.45% 20.04% 3.80%
At Home Group 4.18% 7.53% 3.21%

Insider and Institutional Ownership

95.7% of Restoration Hardware shares are owned by institutional investors. Comparatively, 24.7% of At Home Group shares are owned by institutional investors. 18.8% of Restoration Hardware shares are owned by company insiders. Comparatively, 7.3% of At Home Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

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’.

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.

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