Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<ul><li>The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.</li><li>Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.</li><li>Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. </li></ul>

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&amp;P 600 Small Cap Index, which is down 6.3%.Meanwhile, the S&amp;P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024. 

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>RH, previously Restoration Hardware, exhibited positive stride in its financial and operational endeavors during the second quarter of fiscal 2024, as outlined in its latest earnings call.</li><li>The results were mostly favorable with noteworthy highlights such as a 7% increase in demand and 3.6% growth in revenues amounting to $830 million compared to the previous year.</li><li>This growth was propelled by strategic expansions and product transformations, notable investments during an economically challenging phase, and detailed preparation for projected housing market rebound.</li></ul>

RH, previously Restoration Hardware, exhibited positive stride in its financial and operational endeavors during the second quarter of fiscal 2024, as outlined in its latest earnings call.The results were mostly favorable with noteworthy highlights such as a 7% increase in demand and 3.6% growth in revenues amounting to $830 million compared to the previous year.This growth was propelled by strategic expansions and product transformations, notable investments during an economically challenging phase, and detailed preparation for projected housing market rebound.

RH (Restoration Hardware): Brand Image Transcendence & Other Major Drivers

<ul><li>RH reported results for the first quarter of fiscal 2023 that showed both positive elements and areas for concern, which hold implications for investors considering a position in the company.</li><li>Starting with the positives, RH noted an uptick in demand trends within the quarter.</li><li>The company has engaged in a significant product overhaul and platform expansion, which has begun showing promising results despite a heavily challenged housing market.</li></ul>

RH reported results for the first quarter of fiscal 2023 that showed both positive elements and areas for concern, which hold implications for investors considering a position in the company.Starting with the positives, RH noted an uptick in demand trends within the quarter.The company has engaged in a significant product overhaul and platform expansion, which has begun showing promising results despite a heavily challenged housing market.

RH (Restoration Hardware): How Are They Expanding Into New Markets? - Major Drivers

<ul><li>Restoration Hardware (RH) has consistently demonstrated its resilience in the face of various market challenges.</li><li>RH's Q3 2023 earnings call reiterated this persistence as the company navigated through higher-than anticipated expenses and a challenging housing market, reflecting on both the areas of strength and weakness in the company’s financial performance.</li><li>One of the highlights was that the company's net revenues for the quarter stood at $751 million, which was at the midpoint of its guidance.</li></ul>

Restoration Hardware (RH) has consistently demonstrated its resilience in the face of various market challenges.RH's Q3 2023 earnings call reiterated this persistence as the company navigated through higher-than anticipated expenses and a challenging housing market, reflecting on both the areas of strength and weakness in the company’s financial performance.One of the highlights was that the company's net revenues for the quarter stood at $751 million, which was at the midpoint of its guidance.

RH (Restoration Hardware): Initiation Of Coverage - What Is Their Biggest Competitive Advantage? - 5 Major Growth Drivers

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

<ul>
<li>RH is the only luxury lifestyle brand at scale on this planet;</li>
<li>Both qualitative and quantitative evidence point to the emerging and probably widening economic moat around the business;</li>
<li>We see rich optionality regarding RH's growth trajectory moving forward;</li>
</ul>


RH is the only luxury lifestyle brand at scale on this planet;
Both qualitative and quantitative evidence point to the emerging and probably widening economic moat around the business;
We see rich optionality regarding RH's growth trajectory moving forward;


United States

RH distributes home furnishing products. The Company offers products such as furniture, lighting, textiles, bathware, decor, outdoor, and garden, as well as baby and child products. RH distributes its products through retail stores, catalogs, and websites.

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RH (RH US)

WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance

The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x...

Water Tower Research

RH (Restoration Hardware): Brand Image Transcendence & Other Major Drivers

RH, previously Restoration Hardware, exhibited positive stride in its financial and operational endeavors during the second quarter of fiscal...

Baptista Research

RH (Restoration Hardware): How Are They Expanding Into New Markets? - Major Drivers

RH reported results for the first quarter of fiscal 2023 that showed both positive elements and areas for concern, which hold implications for...

Baptista Research

RH (Restoration Hardware): Initiation Of Coverage - What Is Their Biggest Competitive Advantage? - 5 Major Growth Drivers

Restoration Hardware (RH) has consistently demonstrated its resilience in the face of various market challenges. RH's Q3 2023 earnings call...

Baptista Research

RH: A One-Of-Its-Kind Business

Short-termist Mr. Market appears quite bearish on this winning luxury lifestyle brand, creating opportunities for long-term, patient investors.

Steven Chen

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