Restoration Hardware (RH) closed the most recent trading day at $685, moving +1.48% from the previous trading session. This change outpaced the S&P 500’s 1.02% gain on the day.
Heading into today, shares of the furniture and housewares company had lost 0.32% over the past month, lagging the Retail-Wholesale sector’s gain of 0.19% and the S&P 500’s gain of 3.01% 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 $6.45 per share, which would represent year-over-year growth of 31.63%. Meanwhile, our latest consensus estimate is calling for revenue of $972.26 million, up 37% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $22.62 per share and revenue of $3.68 billion, which would represent changes of +26.86% and +29.23%, respectively, from the prior year.
Any recent changes to analyst estimates for RH should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. RH currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, RH is holding a Forward P/E ratio of 29.85. This represents a premium compared to its industry’s average Forward P/E of 15.56.
Meanwhile, RH’s PEG ratio is currently 1.7. 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 1.45 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 18, putting it in the top 8% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.