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

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Restoration Hardware (RH - Free Report) closed at $701.30 in the latest trading session, marking a +1.09% move from the prior day. This change outpaced the S&P 500's 0.15% gain on the day.

Prior to today's trading, shares of the furniture and housewares company had gained 2.37% over the past month. This has outpaced the Retail-Wholesale sector's loss of 5.75% and the S&P 500's gain of 1.68% in that time.

Wall Street will be looking for positivity from RH as it approaches its next earnings report date. The company is expected to report EPS of $6.54, up 33.47% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $972.26 million, up 37% from the year-ago period.

RH's full-year Zacks Consensus Estimates are calling for earnings of $22.90 per share and revenue of $3.68 billion. These results would represent year-over-year changes of +28.44% and +29.23%, respectively.

Investors should also note any recent changes to analyst estimates for RH. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.08% higher. RH currently has a Zacks Rank of #2 (Buy).

Digging into valuation, RH currently has a Forward P/E ratio of 30.3. This valuation marks a premium compared to its industry's average Forward P/E of 15.41.

Also, we should mention that RH has a PEG ratio of 1.73. 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. Retail - Home Furnishings stocks are, on average, holding a PEG ratio of 1.53 based on yesterday's closing prices.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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