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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 the most recent trading day at $659.07, moving +0.85% from the previous trading session. This change outpaced the S&P 500's 0.75% gain on the day.

Coming into today, shares of the furniture and housewares company had lost 4.66% in the past month. In that same time, the Retail-Wholesale sector lost 2.43%, while the S&P 500 lost 0.05%.

Investors will be hoping for strength from RH as it approaches its next earnings release. The company is expected to report EPS of $6.70, up 8.06% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $985.98 million, up 16.71% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $25.90 per share and revenue of $3.76 billion. These totals would mark changes of +45.26% and +31.91%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for RH. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business 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, the Zacks Consensus EPS estimate remained stagnant. RH is holding a Zacks Rank of #1 (Strong Buy) right now.

Valuation is also important, so investors should note that RH has a Forward P/E ratio of 25.24 right now. For comparison, its industry has an average Forward P/E of 15.15, which means RH is trading at a premium to the group.

It is also worth noting that RH currently has a PEG ratio of 1.34. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. RH's industry had an average PEG ratio of 1.34 as of yesterday's close.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 45, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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