What You Should Watch With RH Stock in 2026

Core Viewpoint - RH, the high-end home furnishings company, has faced significant challenges in 2025, primarily due to a sluggish housing market and increased tariffs, leading to a nearly 60% decline in stock value this year [2][3][11] Group 1: Stock Performance - The stock has experienced multiple boom-and-bust cycles over the past decade, with a notable downturn in 2025 as the housing market hit a 30-year low [2] - Despite the stock's poor performance, RH reported an 8.4% revenue growth in the second quarter of 2025, indicating solid operational performance [5] - The stock is currently trading at $161.39, with a market capitalization of $3 billion, and has a gross margin of 44.65% [9] Group 2: Housing Market Impact - The housing market's decline has significantly impacted RH's business, with CEO Gary Friedman stating it is operating in "the worst housing market in almost 50 years" [7] - There is uncertainty regarding the housing market's recovery in 2026, although a potential decrease in interest rates could improve mortgage affordability [7][8] Group 3: European Expansion - RH is actively expanding into Europe, having opened several galleries, including RH Paris, and plans to open more in marquee markets like London and Milan in 2026 [9][10] - The company anticipates that its European and Middle Eastern expansion could double its business size within the next five to seven years [10] Group 4: Future Outlook - The stock may be undervalued following the sell-off in 2025, and if the company can deliver on its growth strategies and the macroeconomic environment improves, a recovery in 2026 is possible [11]