RH (Restoration Hardware) is set to release its earnings report after Thursday’s market close. The company’s stock, which reached a record high of $744.56 in 2021, is currently trading around $277. Investors are anticipating potential significant movements in the stock price following the earnings announcement, with the possibility of a surge if the results exceed expectations or a decline if they fall short.
Analysts are forecasting a loss of ($0.08) per share on revenue of $724.67 million for RH. The unofficial ‘Whisper number’ suggests a loss of ($0.01) per share, reflecting the market’s sentiment towards the company’s earnings.
Fundamentals Overview
Over recent years, RH has experienced fluctuations in its earnings trajectory. After a period of steady growth from 2018 to 2023, earnings are projected to decline significantly in 2024 before gradually recovering in 2025 and 2026. Earnings per share stood at $19.90 in 2023 and $26.12 in 2022. However, the expected earnings for 2024 are $6.82 per share, indicating a substantial decrease. Projections show a growth to $8.75 per share in 2025, followed by a rebound to $14.69 per share in 2026. The company’s price-to-earnings ratio (P/E) is currently at 44, which is 1.9 times higher than the S&P 500 average. Additionally, the number of prominent funds holding RH stock has risen from 502 to 574.
Technical Analysis
From a technical perspective, RH’s stock is facing downward pressure, trading 32% below its 52-week high. The stock is currently hovering slightly above its 200-day moving average (DMA) but below the 50 DMA, a signal that is often viewed as bearish. Ideally, investors prefer to see the 50 DMA above the 200 DMA, with the stock trading above both levels. However, a positive earnings report could trigger a rally if the stock gaps up. Conversely, a gap down could lead to new multi-year lows.
Company Profile
RH, along with its subsidiaries, operates as a leading retailer in the home furnishings market. The company offers a wide range of products across categories such as furniture, lighting, textiles, bathware, décor, outdoor and garden items, as well as furnishings for babies, children, and teens. RH distributes its products through various online channels including rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com. Additionally, it operates physical retail locations such as RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, and the United Kingdom.
