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Restoration Hardware (RH) Dips More Than Broader Markets: What You Should Know

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Restoration Hardware (RH - Free Report) closed the most recent trading day at $210.10, moving -0.79% from the previous trading session. This change lagged the S&P 500's 0.38% loss on the day. At the same time, the Dow lost 0.46%, and the tech-heavy Nasdaq gained 0.17%.

Coming into today, shares of the furniture and housewares company had lost 4.06% in the past month. In that same time, the Retail-Wholesale sector lost 0.88%, while the S&P 500 lost 4.88%.

Investors will be hoping for strength from RH as it approaches its next earnings release. The company is expected to report EPS of $3.58, up 19.33% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $709.33 million, up 5.58% from the year-ago period.

Investors might also notice recent changes to analyst estimates for RH. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. RH currently has a Zacks Rank of #3 (Hold).

Investors should also note RH's current valuation metrics, including its Forward P/E ratio of 15.46. This represents a premium compared to its industry's average Forward P/E of 13.56.

Meanwhile, RH's PEG ratio is currently 0.87. 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 0.79 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 198, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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