Wall Street Bullish on Several Stocks Despite Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 20 2026
0mins
Source: Yahoo Finance
- Arhaus Sales Weakness: Arhaus (NASDAQ:ARHS) has experienced disappointing same-store sales over the past two years, resulting in a revenue base of only $1.38 billion, which has hindered its ability to achieve economies of scale enjoyed by industry giants, while its earnings per share have declined by 25.6% annually, indicating that its product selection and store experience are failing to attract customers.
- Oshkosh Order Decline: Oshkosh (NYSE:OSK) has seen an average backlog drop of 4.7% over the past two years, suggesting a loss of orders amid increasing competition, and its gross margin of 16.3% reflects high production costs, leading to a 6.8% annual contraction in earnings per share, which puts pressure on stock prices.
- Fastly Customer Spending Challenges: Fastly (NASDAQ:FSLY) has a net revenue retention rate of 107%, trailing the industry benchmark of 110%, indicating difficulties in increasing customer spending, while its gross margin of 59.4% highlights high servicing costs, and its history of operating margin losses further underscores its suboptimal cost structure.
- Market Opportunity Analysis: Despite Wall Street's bullish outlook on these stocks, analysts point out significant fundamental issues with Arhaus, Oshkosh, and Fastly, suggesting that investors should exercise caution regarding their investment value and explore other potentially more rewarding opportunities.
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Analyst Views on ARHS
Wall Street analysts forecast ARHS stock price to rise
10 Analyst Rating
6 Buy
4 Hold
0 Sell
Moderate Buy
Current: 6.860
Low
10.50
Averages
12.21
High
14.00
Current: 6.860
Low
10.50
Averages
12.21
High
14.00
About ARHS
Arhaus, Inc. is a home furnishings brand. The Company operates a vertically integrated model, designing and sourcing products directly from skilled artisans and selected manufacturing vendors around the world, including domestic upholstery production at its own North Carolina manufacturing facility. It has approximately 100 showrooms and design center locations across the United States. Its product assortments span a range of categories and styles, including bedroom, dining room, living room, home office furnishings, and include sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, among others. Its outdoor product assortment includes outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, decor, umbrellas and fire pits. Its bath product assortment includes vanities and storage pieces, faucets and hardware, and Turkish bath towels.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Arhaus Sales Weakness: Arhaus (NASDAQ:ARHS) has experienced disappointing same-store sales over the past two years, resulting in a revenue base of only $1.38 billion, which has hindered its ability to achieve economies of scale enjoyed by industry giants, while its earnings per share have declined by 25.6% annually, indicating that its product selection and store experience are failing to attract customers.
- Oshkosh Order Decline: Oshkosh (NYSE:OSK) has seen an average backlog drop of 4.7% over the past two years, suggesting a loss of orders amid increasing competition, and its gross margin of 16.3% reflects high production costs, leading to a 6.8% annual contraction in earnings per share, which puts pressure on stock prices.
- Fastly Customer Spending Challenges: Fastly (NASDAQ:FSLY) has a net revenue retention rate of 107%, trailing the industry benchmark of 110%, indicating difficulties in increasing customer spending, while its gross margin of 59.4% highlights high servicing costs, and its history of operating margin losses further underscores its suboptimal cost structure.
- Market Opportunity Analysis: Despite Wall Street's bullish outlook on these stocks, analysts point out significant fundamental issues with Arhaus, Oshkosh, and Fastly, suggesting that investors should exercise caution regarding their investment value and explore other potentially more rewarding opportunities.
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- CPI Impact: The April Consumer Price Index (CPI) surged to 3.8%, the highest in nearly three years, indicating rising prices for imported apparel, electronics, and home goods, which pressures retailers as consumers face reduced discretionary income.
- Oil Price Pressure: With oil prices nearing $107, the financial strain on consumers intensifies, squeezing profit margins for retailers, particularly as they head into the back-to-school season where sales and profits are expected to be challenged.
- Market Overreaction: The market's strong reaction to the CPI data led to declines in stocks like Camping World, OneWater, and MarineMax, yet this may present buying opportunities for investors in high-quality stocks during periods of market volatility.
- MarineMax Volatility: MarineMax has experienced 31 moves greater than 5% in the past year, and while its current stock price is close to a 52-week high, long-term investors have seen significant declines in returns, reflecting cautious market sentiment regarding its future performance.
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- Record Revenue: Arhaus achieved a net revenue of $314 million in Q1 2026, marking a 0.9% year-over-year increase, despite challenges from weather disruptions, a delayed catalog release, and geopolitical tensions, demonstrating the company's resilience and adaptability in adverse conditions.
- Sales Trend Improvement: Although comparable written sales decreased by over 5%, management noted significant improvements in trends during the second half of March and into April, indicating a potential recovery in consumer demand that could lay the groundwork for future sales growth.
- Strong Cash Flow: As of the end of the quarter, Arhaus reported $177 million in cash and cash equivalents, primarily reflecting a $49 million special cash dividend paid in March, showcasing the company's strong financial position and flexibility.
- Outlook and Uncertainty: The company expects full-year net revenue to range between $1.43 billion and $1.47 billion, while facing estimated tariff impacts of $30 to $40 million; management remains optimistic about future market performance, emphasizing plans to stimulate demand through increased promotional activities.
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- Earnings Highlights: Arhaus reported Q1 GAAP EPS of $0.02, meeting expectations, with revenue of $314.28 million reflecting a 0.9% year-over-year increase, surpassing market expectations by $0.65 million, indicating the company's resilience in the market.
- Gross Margin Decline: Despite revenue growth, gross margin decreased by 1.0% to $114 million, highlighting increased cost pressures that could impact future profitability.
- 2026 Revenue Outlook: The company projects net revenue for 2026 to be between $1.43 billion and $1.47 billion, slightly above the consensus of $1.45 billion, demonstrating confidence in future growth while planning to open 4 to 6 new showrooms to support sales expansion.
- Adjusted EBITDA Decrease: Adjusted EBITDA fell by 3.1% to $18 million; however, the 2026 adjusted EBITDA is expected to range from $150 million to $161 million, reflecting the company's efforts in cost control and operational efficiency.
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- New Showroom Opening: Arhaus has opened a new approximately 19,300-square-foot showroom in One Loudoun, Ashburn, Virginia, marking its fifth location in the state and reflecting the brand's ongoing expansion in the local market.
- Enhanced Design Services: The new showroom offers complimentary design services aimed at assisting clients with home projects of any scale, thereby enhancing customer experience and fostering brand loyalty.
- Trade Program Relaunch: Arhaus has relaunched its Trade Program, providing exclusive membership for credentialed interior designers, offering special discounts and dedicated support to streamline purchasing processes and improve designers' efficiency.
- Community Contribution: In celebration of the showroom opening, Arhaus donated $10,000 to Loudoun Habitat for Humanity to support local families in improving their housing, demonstrating the brand's commitment to community engagement.
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- Significant Revenue Growth: Arhaus achieved record net revenue of $1.38 billion in FY 2025, reflecting an 8.5% year-over-year increase, underscoring the company's strong competitive edge in craftsmanship and design quality, which is expected to continue attracting high-end client investments.
- Gross Profit and EBITDA Performance: The gross profit for 2025 was $536 million, with adjusted EBITDA at $145 million; despite a 50 basis point decline in gross margin to 38.9% due to rising showroom occupancy costs, the company remains debt-free with $253 million in cash and cash equivalents.
- Showroom Expansion Strategy: By the end of 2025, Arhaus completed 13 new showroom projects, bringing the total to 107, with showroom expansion viewed as a key growth driver that is expected to further enhance market share.
- 2026 Outlook: Management projects net revenue for 2026 to be between $1.43 billion and $1.47 billion, indicating a year-over-year growth rate of 3.7% to 6.6%, and while facing macroeconomic uncertainties, they remain confident in the growth potential of their showrooms.
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