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RH (RH) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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In the latest close session, RH (RH - Free Report) was down 4.62% at $142.50. The stock's change was less than the S&P 500's daily loss of 0.92%. At the same time, the Dow lost 1.18%, and the tech-heavy Nasdaq lost 0.84%.

Heading into today, shares of the furniture and housewares company had lost 14.27% over the past month, lagging the Consumer Staples sector's loss of 0.86% and the S&P 500's gain of 1.48%.

Analysts and investors alike will be keeping a close eye on the performance of RH in its upcoming earnings disclosure. The company's upcoming EPS is projected at $2.13, signifying a 14.11% drop compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $882.95 million, reflecting a 8.77% rise from the equivalent quarter last year.

RH's full-year Zacks Consensus Estimates are calling for earnings of $9.08 per share and revenue of $3.5 billion. These results would represent year-over-year changes of +68.46% and +10%, respectively.

Investors should also note any recent changes to analyst estimates for RH. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. RH presently features a Zacks Rank of #4 (Sell).

Digging into valuation, RH currently has a Forward P/E ratio of 16.45. For comparison, its industry has an average Forward P/E of 19.73, which means RH is trading at a discount to the group.

One should further note that RH currently holds a PEG ratio of 0.64. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. RH's industry had an average PEG ratio of 2.85 as of yesterday's close.

The Consumer Products - Staples industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 183, this industry ranks in the bottom 26% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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