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Here's Why You Should Add RH Stock to Your Portfolio Now
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RH (RH - Free Report) , formerly known as Restoration Hardware, is a leading luxury retailer in the home furnishings space. The company’s new business initiatives like RH Modern, RH Teen, the redesign of RH Interiors Source Book, RH Hospitality, the roll out of Design Ateliers in retail Galleries as well as the acquisition of Waterworks are expected to propel growth in fiscal 2017 and beyond.
This Zacks Rank #2 (Buy) company has solid prospects and should make a valuable addition to your portfolio.
Stock Price Movement
RH’s shares have gained 92.5% in the last three months, compared to the Zacks categorized Retail-Home Furnishing industry’s 7.5% rise. That said, we noticed that RH has outperformed the industry in each of 4-week, 12-week and 52-week time frames. The overall improvement in the U.S. economy along with the rising housing momentum is expected to drive RH’s fiscal 2017 results.
Earnings Growth
RH makes for a great pick in terms of growth investment. Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of bullish prospects.
While RH has put up a historical EPS growth rate (average trailing 12 months EPS growth rate over the last 3-5 years of actual earnings) of 76.5%, compared with the industry average of 3.5%, investors should actually focus on the projected growth (estimated growth rate for fiscal 2017). Here, the company is looking to grow at a rate of 74.8%, while the Zacks categorized Retail-Home Furnishings industry’s earnings are expected to decline 0.8%.
Valuation
The company is currently trading at a trailing 12-month EV/EBITDA ratio of 10.85 while the Retail-Wholesale sector’s average is pegged at 12.23.
RH has a Value Style Score of ‘B’ putting it into the top 20% of all stocks we cover from this look. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Earnings History and Estimate Revisions
RH has beaten earnings estimates in five of the seven trailing quarters. Earnings estimate for the current year and next have also gone up by 10% and 16.3%, respectively, over the past 60 days. The positive earnings estimate revisions indicate a boost in analysts’ confidence, reflecting the stock’s solid rank.
VGM Score
RH has a VGM Score of 'A'. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics. In fact, our research shows that stocks with VGM Scores of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choices.
Other Stocks to Consider
Other top-ranked stocks in the Retail-Wholesale sector include Darden Restaurants, Inc. (DRI - Free Report) , Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) and Yum China Holdings Inc. (YUMC - Free Report) .
Red Robin Gourmet and Yum China sport a Zacks Rank #1. Full-year 2017 earnings for Red Robin Gourmet are expected to increase 2.8%, while that of Yum China are likely to rise 10.7%. You see the complete list of today’s Zacks #1 Rank stocks here.
Darden, a Zacks Rank #2 stock, is expected to witness 12.9% growth in fiscal 2017 earnings.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Here's Why You Should Add RH Stock to Your Portfolio Now
RH (RH - Free Report) , formerly known as Restoration Hardware, is a leading luxury retailer in the home furnishings space. The company’s new business initiatives like RH Modern, RH Teen, the redesign of RH Interiors Source Book, RH Hospitality, the roll out of Design Ateliers in retail Galleries as well as the acquisition of Waterworks are expected to propel growth in fiscal 2017 and beyond.
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This Zacks Rank #2 (Buy) company has solid prospects and should make a valuable addition to your portfolio.
Stock Price Movement
RH’s shares have gained 92.5% in the last three months, compared to the Zacks categorized Retail-Home Furnishing industry’s 7.5% rise. That said, we noticed that RH has outperformed the industry in each of 4-week, 12-week and 52-week time frames. The overall improvement in the U.S. economy along with the rising housing momentum is expected to drive RH’s fiscal 2017 results.
Earnings Growth
RH makes for a great pick in terms of growth investment. Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of bullish prospects.
While RH has put up a historical EPS growth rate (average trailing 12 months EPS growth rate over the last 3-5 years of actual earnings) of 76.5%, compared with the industry average of 3.5%, investors should actually focus on the projected growth (estimated growth rate for fiscal 2017). Here, the company is looking to grow at a rate of 74.8%, while the Zacks categorized Retail-Home Furnishings industry’s earnings are expected to decline 0.8%.
Valuation
The company is currently trading at a trailing 12-month EV/EBITDA ratio of 10.85 while the Retail-Wholesale sector’s average is pegged at 12.23.
RH has a Value Style Score of ‘B’ putting it into the top 20% of all stocks we cover from this look. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Earnings History and Estimate Revisions
RH has beaten earnings estimates in five of the seven trailing quarters. Earnings estimate for the current year and next have also gone up by 10% and 16.3%, respectively, over the past 60 days. The positive earnings estimate revisions indicate a boost in analysts’ confidence, reflecting the stock’s solid rank.
VGM Score
RH has a VGM Score of 'A'. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics. In fact, our research shows that stocks with VGM Scores of 'A' or 'B' when combined with a Zacks Rank #1 (Strong Buy) or 2 make solid investment choices.
Other Stocks to Consider
Other top-ranked stocks in the Retail-Wholesale sector include Darden Restaurants, Inc. (DRI - Free Report) , Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) and Yum China Holdings Inc. (YUMC - Free Report) .
Red Robin Gourmet and Yum China sport a Zacks Rank #1. Full-year 2017 earnings for Red Robin Gourmet are expected to increase 2.8%, while that of Yum China are likely to rise 10.7%. You see the complete list of today’s Zacks #1 Rank stocks here.
Darden, a Zacks Rank #2 stock, is expected to witness 12.9% growth in fiscal 2017 earnings.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>