Restoration Hardware Holdings Inc (RH): A Stock to Fly for Many Years to Come!

Page 1 of 2

I have been saying it for months – buy Restoration Hardware Holdings Inc (NYSE:RH)!

I first said to buy at $40 but kicked my outlook to a whole new level once the stock reached $50 after strong earnings. Now, after yet another great quarter – and a stock that’s trading over $65 – let’s see if there is still value in the stock.

Restoration Hardware Holdings Inc (NYSE:RH)

A Look At The Quarter

For its first quarter, Restoration Hardware Holdings Inc (NYSE:RH) posted revenue of $301.3 million (beat by $2.17 million) and an Earnings Per Share (EPS) of $0.06 (beat by $0.03). The company’s revenue and comparable store-sales growth was 38% and 41%, respectively, year-over-year.

Such year-over-year comparable sales growth is unprecedented, as Restoration Hardware continues to explode with growth while not expanding its total number of stores. The company is currently assessing 20 different markets for expansion – considering its growth – this expansion should provide the next leg of explosive growth in the years ahead.

In addition to beating expectations, Restoration Hardware also raised its full-year guidance and guides ahead of Second Quarter (Q2) EPS estimates. The company also announced two new businesses, RH Kitchen and Tableware and RH Antiques.

Side-By-Side

It’s one thing to present the fundamentals of a company, but regardless of growth, fundamentals don’t tell you whether or not a company is presenting value. Therefore, let’s take a look at Restoration Hardware Holdings Inc (NYSE:RH) compared to other home improvement stores to see if the stock is still cheap.

Restoration Hardware Ethan Allen Interiors Inc. (NYSE:ETH) The Home Depot, Inc. (NYSE:HD) Lowe’s Companies, Inc. (NYSE:LOW)
Market Cap (millions) $2,630 $927 $111,800 $44,540
Trailing P/E N/A 29.45 24.27 23.7
Forward P/E 31.0 19.78 17.95 16.37
Price/Sales 1.9 1.26 1.47 0.88
Operating Margin 1.93% 7.95% 10.89% 7.29
Revenue Growth* 38% (4.4%) 7.4% (0.5%)
Comps Growth* 41% 0.5% 4.3% (0.7%)

*most recent quarter

Let’s look at key takeaways: Restoration has not produced a profit over the last 12 months, has the lowest margins, is more expensive on a sales/valuation basis, but is growing the fastest. While many people may choose to dwell on the lack of profitability, I see upside and room to improve.

What’s most compelling to me is Restoration Hardware Holdings Inc (NYSE:RH)’s operating margin and its price/sales ratio compared to its competitors. First, Restoration Hardware is without question the fastest growing of the four companies. Above, you can see the growth from most recent quarters, but what you can’t see is full-year guidance.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!