Restoration Hardware (RH) Outpaces Stock Market Gains: What You Should Know
Restoration Hardware (RH) closed the most recent trading day at $733.44, moving +1.91% from the previous trading session. This change outpaced the S&P 500's 0.25% gain on the day.
Prior to today's trading, shares of the furniture and housewares company had gained 1.61% over the past month. This has outpaced the Retail-Wholesale sector's loss of 3.19% and lagged the S&P 500's gain of 1.65% in that time.
RH will be looking to display strength as it nears its next earnings release. On that day, RH is projected to report earnings of $6.51 per share, which would represent year-over-year growth of 32.86%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $972.26 million, up 37% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $22.88 per share and revenue of $3.68 billion. These totals would mark changes of +28.32% and +29.23%, respectively, from last year.
It is also important to note the 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.17% higher. RH is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, RH currently has a Forward P/E ratio of 31.45. This valuation marks a premium compared to its industry's average Forward P/E of 15.39.
It is also worth noting that RH currently has a PEG ratio of 1.79. 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. The Retail - Home Furnishings was holding an average PEG ratio of 1.5 at yesterday's closing price.
The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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