RH Stock Sinks Despite Earnings Beat

Analysts are split coming into today

by Laura McCandless

Published on Mar 31, 2020 at 10:05 AM
Updated on Mar 31, 2020 at 10:05 AM

RH (NYSE: RH), formerly known as Restoration Hardware, is down 11.8% to trade at $104 this morning. The company reported fourth-quarter profits of $3.72 per share, higher than Wall Street's estimated $3.59 per share. Despite this, the revenue announced by the retailer was lower than anticipated, coming in at $664.98 million, the firm citing weak traffic in its stores and a high rate of back-ordered product. So far two analysts have cut their price targets, one of which, J.P. Morgan Securities, for the second time this week, and the other, Cowen and Company, to $110 from $238. 

On the charts, RH recently ran into overhead pressure at the 20-day moving average, and is now walking a thing line at the $100 floor. Longer-term, the equity is down 44.7% year-to-date. 

Sentiment over RH has been split, with eight out of 16 analysts in coverage sporting a "strong buy," and the other eight a cool "hold." Meanwhile, the stock's average 12-month price target of $145.57 is a 23.4% premium to current levels. 

In the last 10 weeks, 1.68 calls have been bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This sits higher than 85% of readings from the past year, suggesting that calls rarely outweigh puts to this extent. 

RH's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 87 out of 100. This indicates that the security has tended to exceed options trader's volatility expectations during the past year. 

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Google Postpones Android Reveal, "Now is Not the Time to Celebrate"
"Now is not the time to celebrate," Google said in a message on its website
ZNGA Zooms to 8-Year High on Billion-Dollar Deal
ZNGA is planning to buy Peak for $1.8 billion
Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....