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

Core Viewpoint - RH's shares declined significantly following the announcement of disappointing fourth-quarter results and 2025 guidance, although there are medium-term positive indicators according to analysts [1][4]. Group 1: Quarterly Earnings and Guidance - The fourth-quarter results missed expectations, which was unexpected given the strong demand in the previous quarter [2]. - Revenue growth guidance for 2025 is projected at 10%-13%, below the consensus estimate of 14.2% [3]. - Operating margin guidance is set at 14%-15%, aligning with expectations and in line with financial services estimates of 14.8% [3]. Group 2: Demand and Market Position - Demand slowed in the second half of December but stabilized in January with a 19% increase [3]. - RH's demand growth is outperforming peers, driven by product newness and increased catalog circulation [4]. - The company has the potential to manage tariffs better due to its higher price points, which provide more pricing power [4]. Group 3: Analyst Ratings and Price Action - Analyst Cristina Fernández maintained an Outperform rating but reduced the price target from $420 to$280 [1]. - At the time of publication, RH's shares had fallen by 41.8% to $145.29 [4].