2024-03-27 23:07:21 ET
Summary
- RH (formerly Restoration Hardware) shares have risen 23% in the past year but are still 25% below their 52-week high.
- The company's Q4 adjusted EPS was down 75% from last year, and revenue was $40 million below expectations, but guidance was encouraging.
- RH plans to continue investing in its international expansion and controlling inventories, but its aggressive spending and reduced cash flow raise concerns.
- An improved housing market should help results, but there are better opportunities for investors.
Shares of RH (RH), formerly known as Restoration Hardware, are up 23% from a year ago, but this hides what a bumpy ride it has been. Shares closed Wednesday about 25% below their 52-week high. After giving encouraging guidance, shares rallied by 8% past $320 Wednesday after hours. Even after this move, shares have still been more than cut in half from their 2021 highs above $730. While I believe there is a turnaround happening, I would not rush into shares....
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RH: Q4 Earnings, Improved Results May Be Coming, But Are Likely Priced In