Arhaus, Inc. (ARHS) stock analysis

P/E above its 5-year median

Arhaus's P/E of 31.7 is above its own 5-year median of 17.8.

P/E above the industry

Arhaus's P/E of 31.7 is above the Consumer discretionary median of 19.6.

EV/EBITDA above its 5-year median

Arhaus's EV/EBITDA of 12.6 is above its 5-year median of 8.5.

P/B above the industry

Arhaus's price-to-book of 4.85 is above the Consumer discretionary median of 4.85.

Trading above fair value

The share price of $14.56 is above our fair value estimate of $9.62.

Margin of safety under 20%

The price is 51.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -21.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -11.8% over the last twelve months, against a 5-year average of 61.7% a year.

Growing faster than the industry

Revenue grew 5.2% over the last twelve months; the Consumer discretionary median is 2.2%.

Guidance raised

Arhaus raised its Full-Year 2026 Net income (6) outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 39.8% over the last twelve months, against 39.4% a year earlier.

Return on equity over 15%

Return on equity was 15.7% over the last twelve months and averaged 60.1% over five years.

Return on capital over 10%

Return on invested capital was 50.9%, above the 10% that usually covers the cost of capital.

Return on equity below the industry

Arhaus's return on equity of 15.7% is below the Consumer discretionary median of 15.7%.

Earnings grew over 5 years

Net income grew 61.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.5% over the last twelve months, against a 5-year average of 6.8%.

Net margin above the industry

Arhaus's net margin of 4.5% is above the Consumer discretionary median of 3.1%.

No debt

Arhaus has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 1.30 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.55; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Arhaus paid dividends worth 2.4% of the share price over the last twelve months.

Yield below Treasuries

The 2.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Arhaus yields 2.4%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 76.6% of net income.

Covered by free cash flow

Dividends take 47.4% of free cash flow.