RH Shares Tank After Q4 Disappoints, Analyst Cuts Price Target By 30%; But There's A Silver Lining

Shares of RH (NYSE:RH) tanked after the company announced downbeat quarterly earnings on Wednesday.

While the company announced disappointing fourth-quarter results and 2025 guidance, Telsey Advisory Group says there is reason to "stay positive" about the company’s performance in the medium term.

The RH Analyst: Analyst Cristina Fernández maintained an Outperform rating, while slashing the price target from $420 to $280.

The RH Thesis: The fourth-quarter results missing expectations was surprising since the company had witnessed robust demand through the previous quarter, Fernández said in the note.

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RH indicated that demand had slowed during the second half of December, "albeit stabilized in January at up 19%," she added.

Macro uncertainty and slower demand growth resulted in RH's revenue growth guidance for 2025 coming in at 10%-13%, below consensus of 14.2%, the analyst stated.

"Positively, operating margin guidance of 14%-15% was largely as we expected and in line with FS at 14.8%," she wrote.

The medium-term prospects are bright, with RH’s demand growth being much better than its peers, "driven by product newness and increased catalog circulation," and the company exhibits the "potential to weather tariffs better as its higher price points give it more pricing power," Fernández further said.

RH Price Action: Shares of RH had declined by 41.8% to $145.29 at the time of publication on Thursday.

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