Back to top

Image: Bigstock

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

Read MoreHide Full Article

RH (RH - Free Report) closed the latest trading day at $333.13, indicating a -0.01% change from the previous session's end. The stock trailed the S&P 500, which registered a daily gain of 0.38%. Meanwhile, the Dow gained 0.59%, and the Nasdaq, a tech-heavy index, added 0.09%.

The furniture and housewares company's stock has climbed by 4.71% in the past month, exceeding the Consumer Staples sector's loss of 1.86% and lagging the S&P 500's gain of 4.9%.

The investment community will be paying close attention to the earnings performance of RH in its upcoming release. The company is predicted to post an EPS of $2.68, indicating a 738.1% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $811.9 million, indicating an 8.08% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.67 per share and a revenue of $3.16 billion, representing changes of -17.47% and +4.26%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for RH. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.14% increase. RH is currently sporting a Zacks Rank of #3 (Hold).

In the context of valuation, RH is at present trading with a Forward P/E ratio of 58.72. This denotes a premium relative to the industry's average Forward P/E of 19.31.

Meanwhile, RH's PEG ratio is currently 1.88. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Consumer Products - Staples industry had an average PEG ratio of 2.

The Consumer Products - Staples industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 183, placing it within the bottom 28% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


RH (RH) - free report >>

Published in