Tigress Initiates Home Group At Buy

Ahead of At Home Group Inc HOME earnings after Tuesday's close, Tigress Financial Partners initiated the stock with a Buy rating citing unique experimental shopping experience.

Analyst Phillip Van Deusen believes At Home offers superior assortment of products thus differentiating itself from the rest in the home décor segment.

The brokerage pointed out a survey done by Russell Research indicated increasing assortment by a maximum of 15 times. The analyst indicated the company carried more SKUs than its rivals by 4–16 times as far as bar stools, mirrors, pillows, patio cushions, and rugs are concerned.

"We believe HOME can achieve industry leading Return on Capital, and Economic Profit margin through its distinctive merchandising platform, real estate sourcing strategy and its in-store self-service model. Further, we see HOME bringing its Debt/Cap ratio in-line with its peers over the long-term, which will drive its cost of capital lower thus decreasing its capital charge and driving economic profit growth," the analyst said in a note.

The brokerage thinks the advantage for At Home is that it has 120,000 sq. ft. average size of stores enabling it apportions a maximum of 15 times more square footage per SKU than its rivals. The company offers low prices everyday to the delight of shoppers leveraging its superstore format. Significantly, its rivals are reducing their store count.