Trade-Ideas: Restoration Hardware Holdings (RH) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Restoration Hardware Holdings ( RH) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Restoration Hardware Holdings as such a stock due to the following factors:

  • RH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.4 million.
  • RH is up 3.8% today from today's close.

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More details on RH:

Restoration Hardware Holdings, Inc., together with its subsidiaries, engages in the retail of home furnishings. Its product categories include furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and children's furnishings. RH has a PE ratio of 43. Currently there are 9 analysts that rate Restoration Hardware Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Restoration Hardware Holdings has been 673,900 shares per day over the past 30 days. Restoration Hardware has a market cap of $3.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.64 and a short float of 28.6% with 15.89 days to cover. Shares are down 0.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Restoration Hardware Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 23.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RESTORATION HARDWARE HLDNGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RESTORATION HARDWARE HLDNGS increased its bottom line by earning $2.19 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 59.6% when compared to the same quarter one year prior, rising from $26.64 million to $42.53 million.
  • Net operating cash flow has significantly increased by 84.43% to $105.25 million when compared to the same quarter last year. In addition, RESTORATION HARDWARE HLDNGS has also vastly surpassed the industry average cash flow growth rate of 16.83%.
  • 39.06% is the gross profit margin for RESTORATION HARDWARE HLDNGS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.29% trails the industry average.

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