5 downed home improvement stocks to pick up now

Home improvement companies benefited greatly from the growing consumer interest in renovation and remodeling activities amid the pandemic-led remote lifestyle. However, sowing of home sales this year with soaring mortgage rates amid decades of high inflation is hurting industry growth. Many home improvement companies have been witnessing declining sales recently.

But as many economists believe inflation has peaked, demand for housing and housing improvement should soon rise with falling mortgage rates. In addition, soaring DIY interior design trends to help home improvement companies stay afloat. The global do-it-yourself (DIY) home improvement market is expected to grow by approx 4.4% CAGR to $ 1.28 trillion by 2030. The global housing improvement market is expected to grow by one 6.4% CAGR to reach $ 514.90 billion by 2028.

Therefore, it might be wise to invest in discouraged home improvement stocks Arhaus, Inc. (ARHS), Tile Shop Holdings, Inc. (TTSH), Kingfisher plc (KGFHY), Haverty Furniture Companies, Inc. (HVT), and Builders FirstSource, Inc. (BLDR), which have healthy fundamentals and solid growth prospects.

Arhaus, Inc. (ARHS)

ARHS operates as a lifestyle brand and premium retailer in the home decor market, offering merchandise ranges across various categories, including furniture, lighting, textiles, decor and the outdoors. The company offers its products through an omnichannel model that includes showrooms, an e-commerce platform, a catalog and home design services. Pr. On December 31, 2021, it operated through a network of 71 traditional showrooms, 5 design studios and 3 outlets, as well as 58 showrooms with home interior designers.

For its first fiscal year 2022, ending March 31, 2022, ARHS’s revenue increased 43.5% year-on-year to $ 246.30 million. The company’s gross profit came in at $ 97.72 million, representing an improvement of 38.9% from year to year. Its operating income came in at $ 22.87 million for the quarter, indicating an increase of 102.7% over last year. Pr. As of March 31, 2022, the company had $ 148.84 million in cash and cash.

ARHS exceeded Street EPS estimates in the last three quarters. The consensus revenue estimate of $ 1.17 billion for fiscal year 2022, ending December 31, 2022, represents an increase of 47.1% over the previous year. The company’s EPS is expected to grow at a rate of 7.9% per year over the next five years.

The stock’s 0.82x forward EV / Sales is 26% lower than the 1.11x industry average. In terms of forward price / sales, ARHS is currently trading at 0.68x, which is 28.8% lower than the 0.95x industry average. Over the past week, the stock has lost 5.3% to close yesterday’s trading session at $ 5.57, down 61.9% from its 52-week high of $ 14.95.

ARHS ‘ POWR ratings reflect this promising view. The stock has an overall B rating, which corresponds to Buy in our proprietary rating system. The POWR ratings are calculated by considering 118 different factors, each factor being weighted optimally.

It has an A rating for sentiment and a B rating for quality. click here to see the further assessments for ARHS’s growth, stability, value and momentum. ARHS is ranked # 15 of 63 stocks in Home improvement & goods industry.

Tile Shop Holdings, Inc. (TTSH)

TTSH is a specialist retailer of manufactured and natural stone tiles, installation and maintenance materials and related accessories. The company offers marble, travertine, granite, quartz, sandstone, porcelain, glass, cement, wood and metal tiles. It sells its products through its website and offers delivery services through third-party freight providers.

For its first fiscal year 2022, ending March 31, 2022, TTSH’s net sales increased 11.3% year-on-year to $ 102.47 million. The company’s gross profit came in at $ 66.85 million, indicating an increase of 4.1% over the same period last year. It had $ 13.46 million in cash and cash per share. March 31, 2022

Analysts expect the company’s revenue to improve by 5.2% year-over-year to $ 389.97 million for the fiscal year 2022 ending December 31, 2022. TTSH’s EPS is expected to grow at a rate of 20% per year over the next five years.

The stock’s 0.90x forward EV / Sales is 19% lower than the 1.11x industry average. In terms of forward price / sales, TTSH is currently trading at 0.58x, which is 39% lower than the 0.95x industry average. Over the past week, the stock has lost 4.2% to close yesterday’s trading session at $ 4.37, down 50.9% from its 52-week high of $ 8.90.

TTSH’s POWR Ratings reflect these promising prospects. The stock has an overall B rating, which corresponds to Buy in our proprietary rating system.

It has an A rating for sentiment and quality. click here to see the further assessments of TTSH’s stability, value, growth and momentum. TTSH is ranked # 4 in the same industry.

Kingfisher plc (KGFHY)

Headquartered in London, UK, KGFHY provides home improvement products and services through home improvement and e-commerce specialty stores internationally. The company also offers real estate investing, financing, digital, sourcing and franchising and IT services. It operates approximately 1,470 stores in eight countries across Europe under the brands B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint and Koctas.

On 16 May 2022, KGFHY’s Screwfix business, a multi-channel retailer of trading tools, accessories and hardware products, announced that it was opening its 800th store in June and expanding its footprint through 80 new stores in the UK and Ireland by the end of its fiscal year 2023. This expansion will help Screwfix see increasing demand in the coming months.

For the full fiscal year 2022, ending January 31, 2022, KGFHY’s sales increased 6.8% year-on-year to £ 13.18 billion ($ 16.45 billion). The company’s gross profit came in at £ 4.94 billion ($ 6.16 billion), an increase of 7.9% over the same period last year. Its operating profit came in at £ 1.14 billion ($ 1.43 billion) for the quarter, representing an increase of 24.7% over the previous year. KGFHY’s adjusted net earnings came in at £ 737 million ($ 919.65 million) for the quarter, indicating a 22% year-over-year improvement. Its adjusted EPS came in at 35.2 pence, representing an increase of 22.6% over the previous year.

The stock’s 0.52x forward EV / Sales is 53% lower than the 1.11x industry average. In terms of futures price / sales, KGFHY is currently trading at 0.40x, 57.6% lower than the 0.95x industry average. Over the past week, the stock has lost 5.6% to close yesterday’s trading session at $ 6.19, down 40.9% from its 52-week high of $ 10.47.

KGFHY’s POWR Ratings reflect its solid outlook. The stock has an overall B rating corresponding to Buy in our proprietary rating system.

It has an A grade for value and a B grade for stability and quality. In addition to the POWR Ratings we have just highlighted, you can see the ratings for KGFHY’s Momentum, Growth and Sentiment here. KGFHY is ranked # 14 in the same industry.

Haverty Furniture Companies, Inc. (HVT)

HVT is a specialist retailer of home furniture and accessories, custom upholstery products, eclectic looks and mattress product lines. The company also offers financing through a third-party financing company and an internal revolving charge credit plan. It distributes primarily through retail stores and websites.

HVT’s net revenue for its first quarter for the financial year 2022, ending March 31, 2022, increased 1% year-on-year to $ 238.95 million. The company’s gross profit came in at $ 140.96 million, representing an improvement of 4.4% from year to year. Its pre-tax revenue came in at $ 25.72 million for the quarter, an increase of 1.4% over the previous year. HVT’s EPS rose 6.7% year-on-year to $ 1.11. The company had $ 162.34 million in cash per share. March 31, 2022

The company exceeded Street EPS estimates in each of the subsequent four quarters, which is impressive. Its EPS is expected to grow by 13.1% annually over the next five years.

HVT’s 0.54x forward EV / Sales is 51.5% lower than the 1.11x industry average. In terms of futures price / sale, the stock is currently trading at 0.47x, 50.9% lower than the 0.95x industry average. Over the past three months, the stock has lost 3.3% to close yesterday’s session at $ 27.73, down 42.9% from its 52-week high of $ 48.54.

HVT’s strong fundamentals are reflected in its POWR rating. It has an overall rating of B, which corresponds to Buy in our proprietary rating system.

The stock has an A rating for Value and Quality and a B for Sentiment. click here to see the additional assessments for HVT (Momentum, Stability and Growth). The stock is number 3 in the same industry.

Builders FirstSource, Inc. (BLDR)

BLDR manufactures and supplies building materials, manufactured components and construction services to professional homebuilders, subcontractors, remodeling workers and consumers. The company also distributes dimensional timber and timber board products, mills, windows, interior and exterior doors and other construction products. It offers a range of construction-related services, including professional installation, turnkey framing and shell construction, spanning all of its product categories.

On January 5, 2022, BLDR acquired National Lumber, the largest independent building materials supplier in New England. National Lumber’s various building materials and service offerings, including prefabricated turbine components and a robust R&R mix, will add even more depth to the value-creating solutions that BLDR customers trust. This acquisition was to strengthen BLDR’s presence in New England.

BLDR’s first-quarter 2022 net revenue increased 36.1% year-on-year to $ 5.68 billion. The company’s gross profit came in at $ 1.83 billion, indicating an improvement of 71.3% year-on-year. Its operating income came in at $ 863.81 million for the quarter, representing an increase of 248.4% over the previous year. While its adjusted net income increased 136.5% year-on-year to $ 700.80 million, its adjusted EPS grew 174.7% to $ 3.90. Pr. As of March 31, 2022, the company had $ 281.80 million in cash and cash.

Analysts expect the BLDR’s EPS to be $ 12.17 for the fiscal year 2022 ending December 31, 2022, representing a 17.9% year-over-year improvement. It exceeded Street EPS estimates in each of the subsequent four quarters, which is impressive. The $ 21.65 billion consensus revenue estimate for the same fiscal year represents an 8.8% year-over-year improvement. The company’s EPS is expected to grow by 18.8% annually over the next five years.

The stock’s 0.69x forward EV / Sales is 58% lower than the 1.65x industry average. In terms of futures price / sales, BLDR is currently trading at 0.53x, which is 61.3% lower than the 1.36x industry average. Over the past week, the stock has lost 1% to close yesterday’s trading session at $ 27.73, down 24.6% from its 52-week high of $ 86.48.

BLDR’s strong fundamentals are reflected in its POWR rating. The stock has an overall B-rating, which corresponds to Buy in our proprietary rating system.

It has a B-grade for value, growth, momentum, sentiment and quality. click here to see the additional assessments for BLDR’s stability. BLDR is number 2 in the same industry.


ARHS shares closed at $ 5.53 on Friday, down $ -0.04 (-0.72%). Year-to-date, ARHS has fallen -58.26%, against an increase of -17.67% in the benchmark S&P 500 index over the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a particular interest in finding market inefficiencies. She is passionate about educating investors so they can find success in the stock market. More…

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