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

Zacks Equity Research

Restoration Hardware (RH) closed at $107.11 in the latest trading session, marking a -0.76% move from the prior day. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow lost 0.51%, and the Nasdaq, a tech-heavy index, added 0.21%.

Heading into today, shares of the furniture and housewares company had lost 16.59% over the past month, lagging the Retail-Wholesale sector's gain of 5.84% and the S&P 500's gain of 4.65% in that time.

RH will be looking to display strength as it nears 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, our latest consensus estimate is calling for revenue of $583.57 million, up 4.69% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.39 per share and revenue of $2.61 billion, which would represent changes of -1.76% and +3.84%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for RH. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 15.29% lower. RH currently has a Zacks Rank of #3 (Hold).

Investors should also note RH's current valuation metrics, including its Forward P/E ratio of 12.87. This valuation marks a discount compared to its industry's average Forward P/E of 17.96.

Investors should also note that RH has a PEG ratio of 1.03 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Home Furnishings stocks are, on average, holding a PEG ratio of 1.03 based on yesterday's closing prices.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 203, which puts it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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