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

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Restoration Hardware (RH) closed the most recent trading day at $669.76, moving -0.5% from the previous trading session. This change lagged the S&P 500's daily gain of 0.42%.

Coming into today, shares of the furniture and housewares company had lost 0.87% in the past month. In that same time, the Retail-Wholesale sector lost 1.87%, while the S&P 500 gained 2.64%.

Wall Street will be looking for positivity from RH as it approaches its next earnings report date. In that report, analysts expect RH to post earnings of $6.51 per share. This would mark 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.

RH's full-year Zacks Consensus Estimates are calling for earnings of $22.88 per share and revenue of $3.68 billion. These results would represent year-over-year changes of +28.32% and +29.23%, respectively.

Any recent changes to analyst estimates for RH should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.17% higher. RH is currently a Zacks Rank #3 (Hold).

In terms of valuation, RH is currently trading at a Forward P/E ratio of 29.42. Its industry sports an average Forward P/E of 15.26, so we one might conclude that RH is trading at a premium comparatively.

Also, we should mention that RH has a PEG ratio of 1.68. 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 industry currently had an average PEG ratio of 1.48 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 34, putting it in the top 14% 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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