Restoration Hardware stock prediction for December 2021 after spiking 10%

on Dec 9, 2021
  • Restoration Hardware shares on Thursday rocketed 10%.
  • The company announced its most recent quarterly results Wednesday after the close.
  • RH’s FQ3 results outperformed analyst expectations on revenue and earnings.

On Thursday, Restoration Hardware Holdings Inc. (NYSE:RH) shares spiked 10% after reporting its most recent quarterly results. The company announced its fiscal third-quarter revenue and earnings Wednesday after markets closed, beating the consensus for analyst expectations. The company also raised the base forecast on its full-year 2021 revenue and operating margin growth expectations.

RH posted FQ3 non-GAAP earnings per share of $7.03 surpassing the average analyst estimate of $6.59. On the other hand, its GAAP EPS of $5.88 missed the consensus forecast of $6.61, while revenue for the quarter increased by 18.5% from FQ3 last year to $1 billion, exceeding expectations by $18.18 million.

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The company now expects its top line to grow by 32%-33% from $31%-33%, previously. On the other hand, RH forecasts its operating margin to improve by 25.3% to 25.5%, from 24.9% to 25.5% in the previous guidance.

Is RH still a good bet?

From an investment perspective, RH shares trade at reasonable trailing 12-month and forward P/E ratios of 29.21 and 24.32, respectively. Therefore, the stock could be an interesting option for value investors.

Moreover, analysts expect its earnings to grow by nearly 10% this year, before rising at an average annual rate of more than 23% over the next five years. Therefore, it could also gain the interest of growth investors.

Source – TradingView

Technically, RH seems to have recent;y spiked to complete an upward breakout from a descending channel formation. As a result, the stock has recovered from oversold conditions of the 14-day RSI.

Therefore, investors could target extended rebounds at about $681.78, or higher at $736.02, while $596.08 and $540.91 are crucial support zones.

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