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Investing.com - Piper Sandler raised its price target on Arhaus Inc (NASDAQ:ARHS) to $11.00 from $9.00 on Friday, while maintaining a Neutral rating on the home furnishings retailer. The stock, currently trading at $11.99, has shown remarkable momentum with a 38% surge in the past week. According to InvestingPro data, the company’s stock is currently trading near its 52-week high of $13.97.
The research firm cited Arhaus’ solid second-quarter performance, which benefited significantly from bringing operations for the Dallas distribution center in-house. This operational change allowed for faster delivery on backlog orders, contributing to the quarter’s positive results. The company’s operational efficiency is reflected in its strong financial metrics, with InvestingPro data showing a healthy gross profit margin of 45.5% and annual revenue of $1.29 billion.
Piper Sandler noted that demand trends remain volatile, with a 2.6% decline in the second quarter, though July showed positive mid-teens growth against easier year-over-year comparisons. The company maintained its full-year guidance despite the choppy demand environment.
The firm increased its EBITDA multiple from 7x to 9x, reflecting greater confidence that Arhaus can grow from trough earnings expected in 2025 and 2026. Both years will be impacted by tariff and IT investment headwinds, according to the research note.
Piper Sandler also highlighted that new CFO Mike Lee has improved messaging and communication compared to the previous two quarters, while noting Arhaus still faces near-term execution risk on IT system implementations and tougher comparisons starting in the fourth quarter.
In other recent news, Arhaus Inc reported a strong financial performance for Q2 2025, beating earnings expectations significantly. The company achieved an earnings per share (EPS) of $0.28, surpassing the anticipated $0.15, which represents an 86.67% surprise. Revenue also exceeded forecasts, reaching $358 million compared to the expected $333.46 million. In addition to the earnings news, Telsey Advisory Group raised its price target for Arhaus to $12.00 from $10.00, maintaining a Market Perform rating. The research firm highlighted Arhaus’s differentiated product assortment and showroom experience as key strengths. Arhaus has seen increased brand awareness, partly due to a 30% increase in its showroom count over the past three years. These developments indicate positive momentum for Arhaus in the home furnishings sector.
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