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RH (RH) Stock Sinks As Market Gains: Here's Why

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RH (RH - Free Report) ended the recent trading session at $212.74, demonstrating a -3.74% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 0.07%. Elsewhere, the Dow lost 0.7%, while the tech-heavy Nasdaq added 0.18%.

Shares of the furniture and housewares company witnessed a gain of 18.21% over the previous month, beating the performance of the Consumer Staples sector with its loss of 0.29%, and the S&P 500's gain of 5.71%.

Analysts and investors alike will be keeping a close eye on the performance of RH in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $3.19, marking a 88.76% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $907.28 million, indicating a 9.36% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.76 per share and a revenue of $3.53 billion, indicating changes of +99.63% and +11.01%, respectively, from the former year.

It's also important for investors to be aware of any recent modifications to analyst estimates for RH. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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, there's been no change in the Zacks Consensus EPS estimate. Right now, RH possesses a Zacks Rank of #3 (Hold).

In terms of valuation, RH is currently trading at a Forward P/E ratio of 20.55. Its industry sports an average Forward P/E of 20.55, so one might conclude that RH is trading at no noticeable deviation comparatively.

Also, we should mention that RH has a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Consumer Products - Staples industry stood at 3.76 at the close of the market yesterday.

The Consumer Products - Staples industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 85, placing it within the top 35% of over 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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