| Stock (Symbol) | Stock Price | |
Restoration Hardware (RH) |
$100 |
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| Data is as of | Expected to Report | Sector |
September 14, 2015 |
Dec 8 – Dec 14 |
Retail & Travel |
| Sharek’s Take | ||
 Restoration Hardware debuts RH Modern. This new modern-sleek line of furniture should be a catalyst for growth and could take RH stock to another level. Check out the site and this video here. The concept was unveiled at RH’s new free-standing Chicago location encompasses 70,000 sq ft over six floors that includes a wine bar, performance stage, rooftop courtyard and coffee shop. The Beverly Hills flagship store will be open in a month, and the existing Manhattan and Atlanta stores will soon add the line as well. The line even has a 540 page catalog. I feel the new line will do great, West Elm is showing strong growth and RH Modern will trump that with both a better style and a higher price. RH has been growing profits around 25% the past 3 qtrs, and growth is expected to accelerate to 31%, 36% and 48% the next 3 qtrs due to the new line in addition to new stores opening in Chicago, Tampa, Denver, Austin and the flagship RH Modern in Beverly Hills. At 32x earnings the stock is reasonable, and in my estimation has 37% upside to 2016’s Fair Value. |
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| One-Year Chart | ||
 This is a good-looking one-year chart. All the numbers are in green and the Est LTG of 27% is promising. All systems are go at this point. |
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| Earnings Table | ||
 Revenue growth was 17% last qtr and that boosted profits 27%. Not much news on the West Coast port disruption, which had been a problem — good.RH beat the street by a penny last qtr. Annual Profit Estimates stayed about the same. Quarterly estimates look great — accelerating growth coming PLUS the company could beat these estimates if things go well. |
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| Fair Value | ||
 So this stock has pretty-much sold for 32 to 34 times earnings the last three years. I feel with growth accelerating 35x earnings is fair. My 2016 Fair Value is $137, which gives this stock some of the best upside potential of any I cover. |
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| Ten-Year Chart | ||
 RH used to be under the ticker RSTO. It went private at $4.50 a share in 2008, then IPO’d again in November 2012 and opened at $32 a share. I wasn’t a fan of the last concept, which was based in shopping centers. The move to free-standing locations is great. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
3 of 27 |
Restoration Hardware continues to be best retail stock to invest in right now. The concept is set to get a big boost from the RH Modern line in addition to new store openings in big metropolitan cities that appreciate modern styles. This stock has the ability to double in 2-to-3 years and compound in value over the long-term. |
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Aggressive Growth Portfolio
4 of 13 |
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