Activist investor and famed short seller Andrew Left of Citron Research said Tuesday that Restoration Hardware Holdings, Inc (NYSE: RH) is the “clear winner” of a potential large scale shift in American workers outside of expensive, densely populated urban centers.

Left published a bullish note on his latest long position Restoration Hardware on Tuesday and set a $400 price target for the stock. The price target implies roughly 100% upside from current levels, but Left said he wouldn’t be surprised if the stock made it to $800 in time as Wall Street begins to fully appreciate the power of its business model.

The Thesis

Left said many of the top market performers of the past couple of months have been short-term work-from-home trades like Wayfair Inc (NYSE: W), but Restoration Hardware is a long-term play on what he sees as a secular shift in the US economy.

“Regardless of the possibility of a vaccine, the trend of moving out of cities to the suburbs for larger living spaces where people can work from home and the home is a sanctuary will be long-lasting,” Left said.

Left said Restoration Hardware’s target customer demographic is the “upwardly mobile and style conscious consumer” that will soon be looking to move to the suburbs in the modern remote work environment. Left pointed out that the average order size on Wayfair is $235, whereas the most popular Restoration Hardware item is a $10,000 cloud couch.

The company is optimistic it can grow its revenue from between $2 billion and $3 billion today to $20 billion in the long term. Left said even if the company only makes it halfway to that goal, $10 billion in revenue implies at least a $1,000 stock price.

'Hyper Speed'

In the near term, Left says the company should generate the strength of its business by posting positive revenue growth in the second quarter, the quarter many analysts say will mark the bottom of the current downturn.

Left said the valuation gap between Restoration Hardware and both Wayfair and other luxury brands has never been wider.

“We have always been a fan of the product and the stock and now the new way of living will propel this business model into hyper speed,” Left wrote.

Left Not Alone

Left has at least one high-profile investor in his corner. Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) started buying shares of Restoration Hardware in the second half of last year and now holds a $339.9 million position in the stock.

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