Will RH (RH) be Able to Maintain Double-Digit Growth in the Future?

Recurve Capital, an investment management company, released its second-quarter 2025 investor letter. Recurve had a strong second quarter. A copy of the letter can be downloaded here. In Q2 2025, the fund returned +31% gross compared to +10.6% returns for the S&P 500 and 17.8% returns for the Nasdaq. YTD, the fund returned +14.8% gross and +12% net. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its second-quarter 2025 investor letter, Recurve Capital highlighted stocks such as RH (NYSE:RH). RH (NYSE:RH) is a retailer and lifestyle brand in the home furnishings market. The one-month return of RH (NYSE:RH) was 13.37%, and its shares lost 39.00% of their value over the last 52 weeks. On October 2, 2025, RH (NYSE:RH) stock closed at $203.79 per share, with a market capitalization of $3.82 billion.

Recurve Capital stated the following regarding RH (NYSE:RH) in its second quarter 2025 investor letter:

“The large negative contributions from both Cogent and RH (NYSE:RH) have been frustrating. Both are down for valid reasons, but I nonetheless expect great results from these companies over the coming years and they should become meaningful positive contributors to performance.

RH became a lightning rod for tariffs in April. As of this writing, presumably “stable” future tariff rates have been established in its largest source markets (especially China and Vietnam) which have taken the worst-case scenarios off the table (i.e. the bottom branches of the decision tree have been trimmed). There are still a few more tariff negotiations to come, but they are relatively small in exposure and we estimate that RH can offset the gross profit impact of these new tariff rates with about a 6-7% price increase. The company already pushed through HSD/LDD price increase across many SKUs in April/May. In other words, the gross profit impact already has been mitigated. With the most significant headline risks behind us, we see a cleaner operating environment going forward which should allow RH to resume and sustain its double-digit growth for years to come.”

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RH (NYSE:RH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held RH (NYSE:RH) at the end of the second quarter, which was 46 in the previous quarter. While we acknowledge the risk and potential of RH (NYSE:RH) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RH (NYSE:RH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered RH (NYSE:RH) and shared Carillon Eagle Mid Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.