RH – Ordinary Shares – Class A to Report Q1 Earnings Results: A Fundamental and Technical Analysis

☀️ RH – Ordinary Shares – Class A, a leading luxury home furnishings retailer in the United States, is all set to announce its Q1 2023 financial results on May 25th at 5:00 PM EST. The company has been on a rollercoaster ride in the past few months, with its 3-month price performance witnessing a massive drop in February and subsequent recovery in April. In this article, we will conduct a fundamental and technical analysis of RH – Ordinary Shares – Class A based on the data provided, including historical guidance and analysts’ estimates, to gauge what investors can expect from the upcoming earnings call.

Fundamental Analysis

RH – Ordinary Shares – Class A‘s financials for the past year suggest that the company has been performing well, with all quarters reporting a positive net income and a healthy total revenue. The Q4 2023 financials report a net income of 106.9 million USD and a total revenue of 772.5 million USD, which is slightly lower than the Q3 2022 financials reporting a net income of 98.8 million USD and a total revenue of 869.1 million USD. The Diluted EPS was reported at 4.21 million USD for Q4 2023, which is lower than the previous quarter’s Diluted EPS of 3.78 million USD.

However, it is worth mentioning that RH – Ordinary Shares – Class A is a seasonal business, with sales peaking in the second fiscal quarter. Therefore, Q1 earnings results alone might not provide a clear picture of the company’s financial performance for the entire year. Analysts expect the company to report earnings per share (EPS) of 4.32 USD for the first quarter, down from the consensus estimate of 4.89 USD three months ago. The revenue is expected to be around 865.75 million USD, representing a YoY growth of 30.8%.

Despite a moderate dip in the past year’s financials and analysts’ downgraded estimates, the overall market sentiment around RH – Ordinary Shares – Class A remains positive, with the stock showing an uptrend since the beginning of the year, gaining over 23% YTD as of May 19th. The company has been expanding its business operations, launching a new beach house-inspired collection and acquiring a Canadian gourmet food company, Maison Corbeil.

Technical Analysis

RH – Ordinary Shares – Class A‘s 3-month price performance suggests that the stock has been volatile in the short term but has shown signs of recovery in the last month. The stock dipped to a low of 230.6 USD on February 21st, shedding over 14% of its value in three months. However, the stock has been on a steady upward trajectory since then, gaining over 6% in the last month. As of May 19th, the stock was trading at 257.1 USD.

The stock’s 5-day price chart suggests that it has been on a downward trend, shedding over 1.2% of its value since May 15th. However, a conservative view suggests that this short-term dip might not reflect the stock’s long-term potential. The stock has consistently outperformed the S&P 500 index over the past year, indicating that it is an attractive investment option for long-term investors.

Historical Guidance

RH – Ordinary Shares – Class A has consistently exceeded analysts’ EPS estimates over the past year, outperforming the consensus EPS estimate by an average of 27.6% in the last four quarters. The company has been successful in implementing its strategic growth initiatives and enhancing operational efficiency, leading to impressive financial results.

In the Q4 earnings call held earlier this year, RH – Ordinary Shares – Class A‘s Chairman and CEO Gary Friedman expressed confidence in the company’s growth prospects, highlighting the success of its new membership program and international expansion plans. The company also announced a 200 million USD share repurchase program, reflecting the management’s optimism about the future.

Analysts’ Estimates

Wall Street analysts have downgraded their estimates for RH – Ordinary Shares – Class A‘s Q1 financial results, with EPS estimates revised down to 4.32 USD from 4.89 USD three months ago. Similarly, the revenue estimates have been lowered to 865.75 million USD from 881.36 million USD three months ago. However, it is worth noting that Wall Street analysts’ estimates are based on limited information and might not reflect the company’s actual performance.

Conclusion

In conclusion, RH – Ordinary Shares – Class A is all set to announce its Q1 financial results on May 25th, with analysts’ estimates revised down slightly in the past few months. However, the historical financials and the optimistic market sentiment around the stock suggest that it might be an attractive investment option for long-term investors. The company’s successful implementation of strategic growth initiatives and expansion plans indicate that it is well-positioned to capitalize on the post-pandemic economic recovery and growth in the luxury home furnishings sector. Investors are encouraged to tune in to the upcoming earnings call to gain further insights into the company’s performance and growth prospects.