RH (RH) Sees a More Significant Dip Than Broader Market: Some Facts to Know

RH (RH) closed at $171.05 in the latest trading session, marking a -2.76% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.69%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 1.33%.

Shares of the furniture and housewares company have depreciated by 4.38% over the course of the past month, underperforming the Consumer Staples sector's loss of 1.52%, and the S&P 500's gain of 3.96%.

The upcoming earnings release of RH will be of great interest to investors. On that day, RH is projected to report earnings of $0.29 per share, which would represent a year-over-year decline of 90.1%. Meanwhile, the latest consensus estimate predicts the revenue to be $913.96 million, indicating a 1.65% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $5.23 per share and revenue of $3.62 billion, which would represent changes of -16.85% and +5.11%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for RH. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the 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.

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 an unchanged state. Currently, RH is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, RH is presently being traded at a Forward P/E ratio of 33.63. This expresses a premium compared to the average Forward P/E of 20.29 of its industry.

We can also see that RH currently has a PEG ratio of 3.36. 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. As of the close of trade yesterday, the Consumer Products - Staples industry held an average PEG ratio of 3.26.

The Consumer Products - Staples industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 202, putting it in the bottom 18% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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