Can This Home Furnishing Stock Stay Hot in 2021?

HOME traded as low as $1.20 a year ago

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Home decor retailer At Home Group Inc. (NYSE:HOME) has experienced incredible growth over the past year. At Home Group stock hit a three-year high of $31.60 earlier today, and is up a jaw-dropping 2400% from its March 18 bottom of $1.20. Along the channel of higher highs carved out by HOME, the shares' 40-day moving average has contained pullbacks in 2021. 

The company steps into the earnings confessional after the market closes on Tuesday, March 23. It will be hoping to reverse its recent ugly history of post-earnings drops. The stock averages a negative post-earnings move of 22.3% in the last eight quarters, including a 26% plummet back in September. In fact, December's post-earnings gain of 1% was its only positive move in the last eight quarters.

HOME Stock Chart

From a fundamental perspective, At Home Group stock doesn’t offer much security but it does have key factors that make it an interesting speculative play. Aside from the company claiming that it has potential to expand to 600 stores over time, At Home Group also had an impressive growth rate prior to the pandemic. In the span of two years, the retailer grew revenues by more than $300 million. In the past 12 months alone HOME has seen its top line decrease by about $1 million, bringing its revenues total to $1.25 billion. However, that figure is expected to increase to $1.7 billion for fiscal 2021, which would be a massive 36% increase.

On the bottom-line, things aren’t looking quite as promising with net income decreasing by $636 million since fiscal 2019. At Home Group's net losses in the past 12 months total $587 million. The company also has a relatively unsightly balance sheet. At Home Group's total debt currently stands at $1.71 billion, which heavily outweighs its cash balance of $33.86 million, making HOME definitely one of the riskier growth investments at this time.

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