The stock of high-end home furnishing retailer RH (RH) is up 17% after the company issued mixed financial results but offered upbeat forward guidance.
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The California-based company reported third quarter earnings per share (EPS) of $2.48, which was below the consensus estimate of $2.66 expected on Wall Street. Revenue for the quarter totaled $812.73 million, which was slightly ahead of analyst estimates that called for $812.50 million. Sales were up 8.1% from a year earlier.
While the results were mixed, the company formerly known as Restoration Hardware raised its forward guidance, leading to a sharp rise in its share price during after hours trading. RH stock has been on an upswing lately, having risen 18% in the last three months and 30% year-to-date.
Bullish Outlook
RH raised its full-year revenue guidance, saying it expects to 7% year-over-year growth, as well as a 17.3% operating margin. At the same time, the company reported that its current operating margin is 12.5%, up from 6.8% in the same quarter last year.
Analysts and investors appear to have liked what they heard in terms of the outlook from the company that specializes in high-end furniture and home décor. RH also reported that it had negative free cash flow of -$95.99 million at the end of this year’s third quarter. That’s down from $17.57 million in the same quarter of 2023.
Is RH Stock a Buy?
The stock of RH has a consensus Moderate Buy rating among 17 Wall Street analysts. That rating is based on seven Buy, eight Hold, and two Sell recommendations made in the last three months. The average RH price target of $325.50 implies 14.65% downside risk from current levels.
