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Restoration Hardware (RH) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Keurig Dr Pepper (KDP) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank 2 (Buy).

Restoration Hardware (RH) closed the most recent trading day at $105.63, moving -1.01% from the previous trading session. This change lagged the S&P 500's 0.75% loss on the day. Meanwhile, the Dow lost 0.61%, and the Nasdaq, a tech-heavy index, lost 0.57%.

Coming into today, shares of the furniture and housewares company had gained 5.39% in the past month. In that same time, the Retail-Wholesale sector gained 3.67%, while the S&P 500 gained 4%.

Investors will be hoping for strength from RH as it approaches its next earnings release. In that report, analysts expect RH to post earnings of $1.54 per share. This would mark year-over-year growth of 15.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $583.57 million, up 4.69% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.39 per share and revenue of $2.61 billion. These totals would mark changes of -1.76% and +3.84%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for RH. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 2.05% lower. RH is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, RH currently has a Forward P/E ratio of 12.72. This valuation marks a discount compared to its industry's average Forward P/E of 17.84.

Meanwhile, RH's PEG ratio is currently 1.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Home Furnishings industry currently had an average PEG ratio of 1.02 as of yesterday's close.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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