Home decoration retailer At Home Group Inc HOME reported Wednesday an EPS beat and revenue miss in its second quarter, which was interpreted differently by one bull and bear Street analyst.

The Analysts

KeyBanc Capital Markets analyst Bradley Thomas maintains an Overweight rating on At Home Group's stock with an unchanged $14 price target.

Bank of America analyst Curtis Nagle maintains at Underperform with a $5.50 price target.

KeyBanc: Long-Term Plan On Track

At Home Group's second-quarter is highlighted by a better-than-expected comp beat of negative 0.4% versus expectations of negative 0.6%, Thomas wrote in a note. In fact, comps improved on a one-year, two-year, and three basis.

Total sales also rose 19% in the quarter and management remains focused on "surgical" price increases to support momentum.

Management did lower its full-year 2019 comp guidance to a range of -1.5% to 0.5% growth and its long-term net store growth target was also lowered to 10% to better balance profit and growth.

However, the bullish case for the stock remains unchanged and based on the long-term prospect of expanding its store count up to four-fold from current levels, Thomas said.

The company continues to hold a compelling price advantage over rivals which helps support strong new store performance and market share gain.

Finally, investors aren't giving the stock sufficient credit for prior growth, which is compelling enough to support better overall execution and improve cash flow generation, the analyst wrote.

BofA: 'Show-Me Story'

At Home Group's earnings came in better than expected but were still down close to 50% while gross margin declined 385 basis points, Nagle said.

Comps also came in near the low end of management's guidance and inventory growth did improve from 44.1% in the first quarter to 31.7% but still marks an increase on a per-store basis.

Management's focus on slowing down store growth to generate positive free cash flow is "a positive development" as the long-term goal of 600 stores was unchanged, Nagle said.

However, comps remain volatile in a competitive environment which makes the stock a "show-me story" for the time being.

Price Action

Shares of At Home Group were trading lower by 6.08% Thursday at $6.49.