Restoration Hardware (RH) Stock Sinks As Market Gains: What You Should Know

Restoration Hardware (RH) closed the most recent trading day at $118.56, moving -0.18% from the previous trading session. This change lagged the S&P 500's 0.86% gain on the day. Meanwhile, the Dow gained 1.14%, and the Nasdaq, a tech-heavy index, added 0.38%.

Coming into today, shares of the furniture and housewares company had gained 1.85% in the past month. In that same time, the Retail-Wholesale sector lost 7.03%, while the S&P 500 lost 7.55%.

Wall Street will be looking for positivity from RH as it approaches its next earnings report date. This is expected to be March 26, 2019. On that day, RH is projected to report earnings of $2.83 per share, which would represent year-over-year growth of 67.46%. Our most recent consensus estimate is calling for quarterly revenue of $694.33 million, up 3.58% from the year-ago period.

RH's full-year Zacks Consensus Estimates are calling for earnings of $8.39 per share and revenue of $2.55 billion. These results would represent year-over-year changes of +175.08% and +4.47%, respectively.

Any recent changes to analyst estimates for RH should also be noted by investors. 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 10.54% higher. RH is currently a Zacks Rank #1 (Strong Buy).

Investors should also note RH's current valuation metrics, including its Forward P/E ratio of 14.15. For comparison, its industry has an average Forward P/E of 13.77, which means RH is trading at a premium to the group.

Also, we should mention that RH has a PEG ratio of 0.81. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Home Furnishings industry currently had an average PEG ratio of 0.81 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 82, which puts it in the top 32% 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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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