Stock on Watch: RH (RH)

Company Profile:

RH, engages in the retail of home furnishings. It offers products in various categories, such as furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware, and child and teen furnishings. The company sells products through its stores and catalogs, as well as through its Websites. As of October 29, 2016, it operated 85 retail galleries that include 51 legacy galleries, 6 larger format design galleries, 7 next generation design galleries, 1 RH modern gallery, and 5 RH baby & child galleries throughout the United States and Canada; 15 Waterworks showrooms in the United States and the United Kingdom; and 28 outlet stores. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was founded in 1979 and is headquartered in Corte Madera, California.

Recent News:

For the third quarter ended October 29, 2016, the company reported net revenues increased 3% on top of a 10% increase last year. GAAP net income of $2.5 million compared to $20.7 million last year.

For the second quarter ended July 30, 2016, the company reported net revenues increased 7% on top of a 17% increase last year. GAAP net income of $6.9 million compared to $29.9 million last year.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

RH’s strengths can be seen in its better growth, better profitability and better efficiency compared with its peers. Its revenue has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator and RSI stands at 41.01 with positive bias. We rate RH (RH) a STRONG BUY.

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