Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)
P to FCFE Ratio, Current
P to FCFE Ratio, Historical

Free Cash Flow to Equity (FCFE)

RH, FCFE calculation

US$ in thousands

12 months ended:	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Net noncash charges	373,444)	252,316)	335,735)	199,356)	190,761)	215,592)
Change in assets and liabilities	(498,399)	(278,748)	(106,780)	(80,543)	(40,844)	337,330)
Net cash provided by operating activities	403,687)	662,114)	500,770)	339,188)	300,556)	555,102)
Capital expenditures	(173,642)	(185,383)	(111,126)	(93,623)	(136,736)	(112,455)
Borrowings under asset based credit facility	—)	—)	359,401)	322,500)	866,500)	600,000)
Repayments under asset based credit facility	—)	—)	(359,401)	(380,000)	(1,008,970)	(400,030)
Borrowings under term loans	500,000)	2,000,000)	—)	320,000)	—)	180,000)
Repayments under term loans	(21,250)	(5,000)	—)	(324,000)	(80,000)	(100,000)
Borrowings under real estate loans	16,000)	—)	—)	—)	—)	—)
Repayments under real estate loans	(10)	—)	—)	—)	—)	—)
Borrowings under promissory and equipment security notes	—)	—)	12,857)	122,000)	—)	34,000)
Repayments under promissory and equipment security notes	(13,863)	(22,949)	(34,456)	(16,520)	(31,974)	(2,319)
Proceeds from issuance of convertible senior notes	—)	—)	—)	350,000)	335,000)	—)
Purchase of convertible note hedges	—)	—)	—)	(91,350)	(91,857)	—)
Debt issuance costs related to convertible senior notes	—)	—)	—)	(4,818)	(6,349)	—)
Repayments of convertible senior notes	(13,064)	(335,729)	(215,846)	(278,560)	—)	—)
Repayment under convertible senior notes repurchase obligation	(395,372)	—)	—)	—)	—)	—)
Debt extinguishment costs	(8,059)	—)	—)	—)	—)	—)
Debt issuance costs	(28,069)	(26,411)	—)	(4,636)	—)	(8,298)
Principal payments under finance lease agreements, net of tenant allowances	(10,146)	(14,158)	(12,498)	(9,682)	—)	(377)
Proceeds from termination of convertible senior note hedges	231,796)	—)	—)	—)	—)	—)
Free cash flow to equity (FCFE)	488,008)	2,072,484)	139,701)	250,499)	146,170)	745,623)

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).

Net Cash Provided by Operating Activities: The net cash provided by operating activities displayed a fluctuating trend over the six-year period. Starting at 555,102 thousand US dollars in February 2018, there was a significant decline to 300,556 thousand US dollars in February 2019. This was followed by a moderate increase to 339,188 thousand US dollars in February 2020 and a substantial rise to 500,770 thousand US dollars in January 2021. The peak value was observed in January 2022 at 662,114 thousand US dollars before declining to 403,687 thousand US dollars in January 2023. Considering the entire period, the operating cash flow demonstrated volatility with a general recovery trend after the initial drop, although the latest figure indicates a downturn.
Free Cash Flow to Equity (FCFE): The free cash flow to equity exhibited high variability with notable peaks and troughs. Beginning with a strong figure of 745,623 thousand US dollars in February 2018, the FCFE experienced a sharp decrease to 146,170 thousand US dollars in February 2019. It rebounded to 250,499 thousand US dollars in February 2020 but then fell again to 139,701 thousand US dollars in January 2021. A dramatic surge occurred in January 2022 with FCFE reaching 2,072,484 thousand US dollars, more than eight times the previous year's value. However, this was followed by a significant drop to 488,008 thousand US dollars in January 2023. The data suggest considerable fluctuations in free cash flow capacity, with the unusually high value in 2022 potentially due to exceptional events or transactions.

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Price to FCFE Ratio, Current

RH, current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	22,052,211
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	488,008)
FCFE per share	22.13
Current share price (P)	246.82
Valuation Ratio
P/FCFE	11.15
Benchmarks
P/FCFE, Competitors¹
Amazon.com Inc.	84.20
Home Depot Inc.	14.80
Lowe’s Cos. Inc.	17.74
TJX Cos. Inc.	33.48
P/FCFE, Sector
Consumer Discretionary Distribution & Retail	53.26
P/FCFE, Industry
Consumer Discretionary	96.34

Based on: 10-K (reporting date: 2023-01-28).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Price to FCFE Ratio, Historical

RH, historical P/FCFE calculation, comparison to benchmarks

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
No. shares of common stock outstanding¹	22,045,437	21,708,771	20,996,817	19,238,681	20,478,213	21,518,618
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	488,008)	2,072,484)	139,701)	250,499)	146,170)	745,623)
FCFE per share³	22.14	95.47	6.65	13.02	7.14	34.65
Share price^1, 4	245.71	334.28	600.00	118.00	102.95	95.28
Valuation Ratio
P/FCFE⁵	11.10	3.50	90.18	9.06	14.42	2.75
Benchmarks
P/FCFE, Competitors⁶
Amazon.com Inc.	84.16	240.95	—	55.66	—	—
Home Depot Inc.	19.60	19.87	15.41	14.99	—	—
Lowe’s Cos. Inc.	7.08	13.55	12.28	8.69	—	—
TJX Cos. Inc.	33.59	—	10.55	19.71	—	—
P/FCFE, Sector
Consumer Discretionary Distribution & Retail	41.58	51.89	59.10	38.09	—	—
P/FCFE, Industry
Consumer Discretionary	30.88	36.44	83.44	32.34	—	—

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 488,008,000 ÷ 22,045,437 = 22.14

⁴ Closing price as at the filing date of RH Annual Report.

⁵ 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 245.71 ÷ 22.14 = 11.10

⁶ Click competitor name to see calculations.

The analysis of financial data reveals several notable trends and fluctuations over the examined periods.

Share Price: The share price experienced a general upward trajectory from 95.28 US$ in early 2018 to a peak of 600 US$ in early 2020. After reaching this high point, there was a sharp drop to 334.28 US$ in early 2021, followed by a decline to 245.71 US$ by early 2023. Despite the declines after 2020, the share price remained significantly higher than the initial levels observed in 2018 and 2019.
Free Cash Flow to Equity (FCFE) per Share: FCFE per share showed considerable volatility over the periods. It started at 34.65 US$ in 2018, dropped significantly to 7.14 US$ in 2019, and then rose again to 13.02 US$ in 2020. However, it declined to 6.65 US$ in 2021 before surging dramatically to 95.47 US$ in 2022, followed by a decrease to 22.14 US$ in 2023. This pattern indicates fluctuating cash flow generation capabilities. The peak in 2022 stands out as an outlier compared to other years.
Price to Free Cash Flow to Equity (P/FCFE) Ratio: The P/FCFE ratio exhibited substantial variation. It started relatively low at 2.75 in 2018, spiked to 14.42 in 2019, decreased to 9.06 in 2020, then soared to an exceptionally high level of 90.18 in 2021. This was followed by a sharp reduction to 3.5 in 2022 and a rise again to 11.1 in 2023. The fluctuations in this ratio, particularly the spike in 2021, suggest significant changes in the market valuation relative to the cash flow generated.

Overall, the data reflects pronounced volatility both in market valuation and in underlying free cash flow performance. The extreme variations in FCFE per share and the P/FCFE ratio, especially during 2021 and 2022, highlight periods of heightened uncertainty or exceptional operational performance that merit further investigation to understand the driving factors. The decline in share price after the 2020 peak combined with the divergent cash flow metrics suggests a market reassessment of the company's value and cash flow prospects in recent years.

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RH (NYSE:RH)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical