Price to Operating Profit (P/OP)
since 2013
Calculation
RH, P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income (loss) from operations1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 29, 2023 | 7.50 | = | 245.71 | ÷ | 32.76 | 32.76 | = | 722,157 | ÷ | 22,045,437 | |
| Mar 30, 2022 | 7.83 | = | 334.28 | ÷ | 42.71 | 42.71 | = | 927,181 | ÷ | 21,708,771 | |
| Mar 30, 2021 | 26.98 | = | 600.00 | ÷ | 22.23 | 22.23 | = | 466,858 | ÷ | 20,996,817 | |
| Mar 30, 2020 | 6.26 | = | 118.00 | ÷ | 18.86 | 18.86 | = | 362,831 | ÷ | 19,238,681 | |
| Mar 29, 2019 | 7.29 | = | 102.95 | ÷ | 14.12 | 14.12 | = | 289,230 | ÷ | 20,478,213 | |
| Mar 29, 2018 | 15.62 | = | 95.28 | ÷ | 6.10 | 6.10 | = | 131,301 | ÷ | 21,518,618 | |
| Mar 29, 2017 | 29.57 | = | 43.68 | ÷ | 1.48 | 1.48 | = | 53,036 | ÷ | 35,902,419 | |
| Mar 30, 2016 | 8.87 | = | 40.56 | ÷ | 4.57 | 4.57 | = | 185,561 | ÷ | 40,583,845 | |
| Mar 27, 2015 | 23.33 | = | 96.92 | ÷ | 4.15 | 4.15 | = | 165,726 | ÷ | 39,892,540 | |
| Mar 31, 2014 | 52.17 | = | 73.59 | ÷ | 1.41 | 1.41 | = | 54,851 | ÷ | 38,887,454 | |
| Apr 29, 2013 | — | = | 38.32 | ÷ | -1.81 | -1.81 | = | -69,036 | ÷ | 38,108,092 |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of RH Annual Report.
The financial data reflects a decade of significant volatility in equity valuation relative to operating performance. While share prices and operating profits per share experienced substantial growth over the analyzed period, the Price to Operating Profit (P/OP) ratio demonstrates a general long-term decline, indicating a fundamental shift in the market valuation of operating earnings.
- Operating Profit Trajectory
- A transition from an operating loss of 1.81 per share in 2013 to a peak of 42.71 per share in 2022 is observed. This consistent growth in operational profitability indicates a strengthening of core business efficiency over the decade, despite a moderate contraction to 32.76 per share in 2023.
- P/OP Ratio Volatility and Trends
- The P/OP ratio exhibited extreme fluctuations, starting at a peak of 52.17 in 2014 and declining sharply to 8.87 by 2016. After a subsequent spike to 29.57 in 2017, the ratio trended downward to a decade-low of 6.26 in 2020. A significant anomaly occurred in 2021, where the ratio climbed to 26.98, before stabilizing within a narrow range of 7.50 to 7.83 during 2022 and 2023.
- Valuation Divergence
- A pronounced disconnect between market price and operating profit is evident in 2021, where the share price reached 600.00, causing the P/OP ratio to increase more than fourfold compared to the previous year. In contrast, the period between 2019 and 2020 reflects the lowest valuation multiples relative to operating profit, suggesting a period of conservative market pricing despite rising operational gains.
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Comparison to Competitors
RH, P/OP, long-term trends, comparison to competitors
| RH | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | |
|---|---|---|---|---|
| Mar 29, 2023 | 7.50 | 48.43 | 12.16 | 11.18 |
| Mar 30, 2022 | 7.83 | 86.50 | 14.22 | 12.45 |
| Mar 30, 2021 | 26.98 | 64.48 | 17.25 | 13.52 |
| Mar 30, 2020 | 6.26 | 72.85 | 12.33 | 8.11 |
| Mar 29, 2019 | 7.29 | 68.77 | 13.51 | 21.77 |
| Mar 29, 2018 | 15.62 | 64.31 | 13.82 | 10.61 |
| Mar 29, 2017 | 29.57 | 168.60 | 13.26 | 11.97 |
| Mar 30, 2016 | 8.87 | 94.32 | 13.88 | 13.66 |
| Mar 27, 2015 | 23.33 | 123.77 | 14.03 | 14.77 |
| Mar 31, 2014 | 52.17 | 925.12 | 11.86 | — |
| Apr 29, 2013 | — | 221.06 | 13.35 | — |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).