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Bear Of The Day: At Home (HOME)

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Despite a beat in the most recent earnings report, At Home (HOME - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day.  Let’s take a look at why a stock that beats the number is still the lowest Zacks Rank possible.


At Home Group Inc. operates home decor superstores in the United States. The company’s stores offer approximately 50,000 items, such as accent furniture, frames, pottery, bar stools, garden décor, rugs and mats, bedding and bath products, Halloween decorations, sculptures, beds and mattresses, harvest decorations, silk flowers, candles, home organization products, sofas, chairs, kitchenware, stands, Christmas decorations, lamps, storage products, consumables, mirrors, tables, Easter decorations, patio products, vases, floor plants and trees, pet items, wall arts, food preparation items, pillows and cushions, and window treatments. As of April 19, 2017, it operated 124 stores in 31 states. The company was founded in 1979 and is headquartered in Plano, Texas.

Recent Earnings

The company reported $0.28 per share which was $0.02 better than the Wall Street estimate.  Revenues were $234M, firmly above the $229M estimate and the sales were driven by the net addition of 23 new stores.

That solid beat is generally enough to give the stock a Zacks Rank #1 (Strong Buy) or maybe a Zacks Rank #2 (Buy) but the reason this stock slipped to a Zacks Rank #5 (Strong Sell) was the weak guidance the company posted.

At the time of earnings, the company noted that they believed fiscal 2018 would see EPS of $0.72 - $0.75 when the consensus estimate was calling for $0.79.  Those few pennies may not seem like much but it is a big red flag for Wall Street.  The company guided revenues to a range of between $903M -$$910M when the consensus estimate was calling for $905M.  The idea here is that with revenue coming in as expected and earnings coming in lower than expected margins will likely be lower.


At Home Group Inc. Price, Consensus and EPS Surprise

At Home Group Inc. Price, Consensus and EPS Surprise | At Home Group Inc. Quote




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