Analyzing Restoration Hardware (RH) & Lovesac (LOVE)

Restoration Hardware (NYSE:RH) and Lovesac (NASDAQ:LOVE) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Insider and Institutional Ownership

31.2% of Lovesac shares are owned by institutional investors. 29.7% of Restoration Hardware shares are owned by 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 Restoration Hardware and Lovesac’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Restoration Hardware 4.29% 520.85% 8.96%
Lovesac N/A N/A N/A

Analyst Ratings

This is a summary of current recommendations and price targets for Restoration Hardware and Lovesac, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Restoration Hardware 1 7 10 0 2.50
Lovesac 0 0 1 0 3.00

Restoration Hardware presently has a consensus target price of $136.53, suggesting a potential upside of 24.02%. Lovesac has a consensus target price of $26.00, suggesting a potential upside of 35.49%. Given Lovesac’s stronger consensus rating and higher possible upside, analysts clearly believe Lovesac is more favorable than Restoration Hardware.

Valuation and Earnings

This table compares Restoration Hardware and Lovesac’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Restoration Hardware $2.44 billion 0.98 $2.17 million $3.05 36.10
Lovesac N/A N/A N/A N/A N/A

Restoration Hardware has higher revenue and earnings than Lovesac.

Summary

Restoration Hardware beats Lovesac on 6 of the 9 factors compared between the two stocks.

Restoration Hardware Company Profile

RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and teen furnishings. The company provides its products through its retail galleries; and Source Books, a series of catalogs, as well as online through rh.com, restorationhardware.com, rhbabyandchild.com, rhteen.com, and rhmodern.com, as well as waterworks.com. As of February 3, 2018, it operated a total of 83 retail galleries consisting of 16 design galleries, 47 legacy Galleries, 1 RH modern gallery, and 4 RH baby and child galleries throughout the United States and Canada; and 15 Waterworks showrooms in the United States and in the United kingdom, as well as operated 32 outlet stores throughout the United States and Canada. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California.

Lovesac Company Profile

The Lovesac Company designs, manufactures, and sells foam filled furniture, sectional couches, and related accessories. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and accessories comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products through its 66 showrooms at top tier malls and lifestyle centers in 29 states of the United States, as well as through online. The Lovesac Company was founded in 1998 and is headquartered in Stamford, Connecticut.

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