Guggenheim raises Arhaus stock price target to $14 on strong Q2 results

Published 08/08/2025, 14:24
Guggenheim raises Arhaus stock price target to $14 on strong Q2 results

Investing.com - Guggenheim has raised its price target on Arhaus Inc (NASDAQ:ARHS) to $14.00 from $12.00 while maintaining a Buy rating following the company’s second-quarter 2025 financial performance. The stock, currently trading at $11.99, appears overvalued according to InvestingPro analysis, with the company showing a robust 38% return over the past week.

The furniture retailer’s Q2 2025 operating results exceeded Guggenheim’s expectations despite facing a $40-45 million tariff-related headwind, which the research firm noted was better than anticipated. Arhaus management indicated this challenge could be fully addressed with approximately a 3.0% price increase over the next 12 months. The company maintains a healthy 45.5% gross profit margin and operates with a moderate debt level, according to InvestingPro data.

Monthly demand trends showed volatility during the second quarter, with April down 10.0%, May up 6.9%, and June down 9.4%. July showed improvement with a 15.7% demand increase, bringing the year-to-date demand comparison to positive 2.2%.

Arhaus has maintained its full-year 2025 guidance despite the strong Q2 results, incorporating a $12 million net tariff headwind and plans to onboard $10 million in strategic investment spending during the second half of 2025, including ERP-related expenses.

Guggenheim characterized the company’s decision to reaffirm guidance rather than raise it as conservative, given the significant second-quarter outperformance, leading to the research firm’s increased price target and reiterated Buy rating. InvestingPro analysis reveals strong momentum with the stock up 27.5% year-to-date, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other US stocks.

In other recent news, Arhaus Inc reported impressive financial results for the second quarter of 2025, with earnings per share reaching $0.28, significantly surpassing the forecasted $0.15. The company also reported revenue of $358 million, exceeding the anticipated $333.46 million. These results highlight a strong performance and operational efficiency, particularly from changes such as bringing the Dallas distribution center operations in-house. Additionally, Piper Sandler raised its price target for Arhaus from $9 to $11, maintaining a Neutral rating, citing the company’s solid second-quarter performance. Telsey Advisory Group also increased its price target for Arhaus to $12 from $10, attributing the rise to the company’s increased brand awareness and expanded showroom count. Both research firms acknowledge Arhaus’s strong market presence and operational improvements. These developments underscore the company’s strategic advancements and financial achievements.

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