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Restoration Hardware (RH) Gains As Market Dips: What You Should Know

Zacks Equity Research

Restoration Hardware (RH) closed at $101.18 in the latest trading session, marking a +0.04% move from the prior day. This change outpaced the S&P 500's 0.16% loss on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq lost 0.26%.

Coming into today, shares of the furniture and housewares company had lost 9.1% in the past month. In that same time, the Retail-Wholesale sector gained 0.34%, while the S&P 500 lost 0.19%.

Wall Street will be looking for positivity from RH as it approaches its next earnings report date. On that day, RH is projected to report earnings of $1.54 per share, which would represent 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.

RH's full-year Zacks Consensus Estimates are calling for earnings of $8.39 per share and revenue of $2.61 billion. These results would represent year-over-year changes of -1.76% and +3.84%, respectively.

Investors might also notice recent changes to analyst estimates for RH. These recent revisions tend to reflect the evolving nature of short-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.13% lower within the past month. 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 12.06. This valuation marks a discount compared to its industry's average Forward P/E of 14.11.

We can also see that RH currently has a PEG ratio of 0.96. 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 was holding an average PEG ratio of 0.96 at yesterday's closing price.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow RH in the coming trading sessions, be sure to utilize Zacks.com.

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