Arhaus Inc. Class A Common Stock (ARHS)

FairStock Score: 47/100 — MIXED

Key Financials

Strengths

• Generates $103 million in annual free cash flow (9.5% yield on market cap)
• Solid return on equity of 17.6% above cost of capital

Concerns

• Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Arhaus Inc. Class A Common Stock is a micro-cap consumer cyclical company valued at $1.1 billion. The business generates $1.4 billion in annual revenue with a 1.1% net margin and $103 million in free cash flow. From a quality standpoint, Arhaus shows distressed Altman Z-Score of 1.3 warrants caution and adequate 18% ROE. On valuation, the stock is reasonably priced at 15.7x earnings, with trades above its Graham Number with a negative 35% margin. Growth dynamics show revenue growing at 5.1% and profit growth of -29.1%. Our composite FairStock Score of 47/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $103 million in annual free cash flow (9.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer