In the latest trading session, Restoration Hardware (RH) closed at $133.96, marking a -1.88% move from the previous day. This move lagged the S&P 500's daily loss of 0.35%. Meanwhile, the Dow lost 0.68%, and the Nasdaq, a tech-heavy index, added 0.08%.
Coming into today, shares of the furniture and housewares company had lost 13.71% in the past month. In that same time, the Retail-Wholesale sector gained 0.72%, while the S&P 500 gained 2.47%.
Investors will be hoping for strength from RH as it approaches its next earnings release, which is expected to be December 4, 2018. On that day, RH is projected to report earnings of $1.26 per share, which would represent year-over-year growth of 21.15%. Our most recent consensus estimate is calling for quarterly revenue of $640.14 million, up 8.05% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.62 per share and revenue of $2.54 billion, which would represent changes of +149.84% and +4.25%, respectively, from the prior year.
It is also important to note the 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. 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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7.99% higher. RH currently has a Zacks Rank of #3 (Hold).
Digging into valuation, RH currently has a Forward P/E ratio of 17.91. Its industry sports an average Forward P/E of 16.84, so we one might conclude that RH is trading at a premium comparatively.
Meanwhile, RH's PEG ratio is currently 0.71. 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. Retail - Home Furnishings stocks are, on average, holding a PEG ratio of 0.98 based on yesterday's closing prices.
The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 230, putting it in the bottom 10% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
To follow RH in the coming trading sessions, be sure to utilize Zacks.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.