RH trade ideas
HRH | Long | Undervalued Potential Despite High PE | April 2025
1️⃣ Insight Summary:
HRH, a hardware-focused company, seems to be holding up well despite tariff impacts. With its current book value sitting under $24, there's an interesting upside potential ahead — especially with a technical and valuation mix that's catching attention.
2️⃣ Trade Parameters:
Bias: Long
Entry Zone: Around $47.56
Stop Loss: $25.94
TP1: $187.24
TP2: $238.03
TP3: $455.43
3️⃣ Key Notes:
✅ The book value is sitting near $24, hinting at undervaluation.
✅ PE ratio is high — 41 on Yahoo Finance and 71 on TradingView — suggesting some premium pricing or growth expectations.
✅ Revenue is GETTEX:88M with a small $5M in net income — low margins but positive income.
✅ PS ratio is around 0.98, which is relatively attractive for a value play.
✅ Technical levels align with "money magnet" zones — areas where price previously attracted strong volume or interest.
❌ Watch out for the elevated PE — might indicate overvaluation risk unless growth accelerates.
❌ Tariff exposure should also be monitored closely.
4️⃣ Follow-up:
Will continue to monitor how price interacts with the $47–$50 area and provide updates if setup evolves.
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Disclaimer: This is not financial advice. Always conduct your own research. This content may include enhancements made using AI.
BUY RH stock - Oversold / On sale for 40% !RH is oversold following the "Liberation Day" on Trump tariffs, raised investors uncertainty on whether the company will be able or not to handle the tariff rises as it's in the textile industrie.
A higher tariffs could definitly affect the business but as Trump's vision to boost the industrial side of the USA, investors will trust the long term vision of the US president despite a Q3 and Q4 disappointing earnings a next positive earning could bring back an optimistic view and confidence to investors and that could quickly recover the ephemeral sell off into a positive outlook for the next following months as RH is a 1980 established US company with a P/E ratio of 71 meaning that investors expect the company to experience significant growth in the future.
Resulting in a strong sell off out of panic. A sharp decline like this one is not sustainable and a retracement is very likely.
That brings me to seing a short term buy to the 215$ level giving almost 40% rise potential.
Converging with the technicals : Price is in a Weekly Demand zone and is oversold on the H1 RSI and almost on the 2Weeks timeframe.
RH Stock at Critical Support: Rebound or Further Breakdown?
RH has experienced a sharp sell-off, breaking down from its recent highs.
The price is currently testing the lower trendline of the long-term rising channel.
Bull Case
Support at $281 - $289 Holding:
The price is currently sitting at the lower boundary of the ascending channel.
If buyers defend this level, a bounce toward $320 - $350 is possible.
Oversold Conditions:
RSI at 34.33 suggests it is nearing oversold territory.
Stochastic at 9.88 also signals that selling pressure may be exhausted.
If price stabilizes here, it could attract dip buyers.
Resistance Levels to Watch:
$319: First major resistance for a recovery.
$330 - $335: Strong volume resistance where sellers might step in.
Bear Case
Break Below $281 Support:
A confirmed breakdown could accelerate the decline toward $258 , $240.
This would indicate a possible trend reversal from bullish to bearish.
Factors contributing to Bearish:
Price action shows strong selling pressure.
Moving averages sloping downward, signaling a potential continuation of the downtrend.
RSI has been trending lower without divergence, meaning no strong signs of a reversal yet.
Neutral to Slightly Bearish
If $281 holds, a bounce could be expected.
If it breaks down, further sell-off to $258, $240 is likely.
Key Decision Zone: $281 - $290
Holding this level = potential bounce to $319+ (Bullish)
Breaking this level = potential drop to $258 (Bearish)
RH chart looks good hereThe chart is showing a constructive technical setup with several key indicators pointing to potential movement:
Support and Resistance:
The stock is holding above a key support level, suggesting strong demand in the current price range.
Resistance is visible at a higher level, which has historically acted as a ceiling for price action.
Trend:
The stock is trending upwards, forming a series of higher highs and higher lows, indicating sustained bullish momentum.
Moving averages are aligned positively, with shorter-term averages trending above longer-term ones, reinforcing the bullish outlook.
Volume:
Recent sessions show increased trading volume on up days, signaling accumulation by market participants.
Indicators:
RSI (Relative Strength Index) remains within a neutral to bullish range, indicating there’s still room for the stock to move higher without being overbought.
MACD reflects positive momentum, with a bullish crossover further confirming upward strength.
Breakout Potential:
A close above resistance could signal a breakout, opening the door for further upside. However, a sustained move below support might warrant caution.
RH Options Ahead of EarningsIf you haven`t bought the dip on RH:
Now analyzing the options chain and the chart patterns of RH prior to the earnings report this week,
I would consider purchasing the 365usd strike price Puts with
an expiration date of 2024-12-20,
for a premium of approximately $16.30.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Watchlist - Nov 10, 2024This is my weekend watchlist selected from the passive screener, primarily for monitoring potential setups. I didn't find many proper opportunities this time— few setups and most were lower quality, so mainly for observation. Most proper movers are already on the run.
List: PLCE, KYTX, DNA, NPWR, TTGT, OUST, ALGS, SNAP, EYE, APLS, LSCC, DHI, IBTA
RH Options Ahead of EarningsIf you haven`t sold the top on RH, for that fantastic 12.75X gain in the options chain:
nor bought the dip here:
Then analyzing the options chain and the chart patterns of RH prior to the earnings report this week,
I would consider purchasing the 310usd strike price in the money Puts with
an expiration date of 2024-3-28,
for a premium of approximately $21.85.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
RH appears ready to rise from its base LONGRestoration Hardware on the weekly chart rose from COVID and then retraced for almost
two years. It appears now ready to experience some investor and trader interest once again.
It is rising from the POC line of its long term volume profile. The trend strength indicator just
inflected and curled upward. I like to catch trends early to get as much of a move as
possible and before the chasing begins. This is a possible megacap short squeeze set up.
Targets are 380 and 480 as horizontal levels of importance.
RH Stock Surges 15.75% Despite Weak Q4 Earnings Report Luxury furniture retailer RH (NYSE: NYSE:RH ) faced headwinds in its Q4 CY2023 earnings report, missing analyst estimates with a 4.4% year-on-year decline in revenue to $738.3 million. Despite this setback, the company remains optimistic about its growth trajectory, projecting a 9.0% year-on-year revenue increase for the full year, exceeding market expectations.
Mixed Performance Metrics
RH's Q4 earnings revealed a mixed bag of performance metrics. While revenue fell short of analyst estimates by 5.1%, the company's non-GAAP profit per share plummeted by 57.9% compared to the same quarter last year, dropping to $0.72 from $1.71. The gross margin also experienced a decline, slipping to 43.5% from 47.8% in the previous year's quarter.
Optimistic Outlook
Despite the disappointing Q4 results, RH's management remains bullish about the company's future prospects. They anticipate an acceleration in demand trends throughout fiscal 2024, signaling confidence in their ability to navigate challenges in the retail landscape.
Strategic Considerations
NYSE:RH , formerly known as Restoration Hardware, operates as a specialty retailer focusing on high-end furniture and home decor. As the retail landscape evolves, furniture retailers like RH must adapt to changing consumer behaviors and preferences. The company's emphasis on aesthetics, style, and charm positions it well to capitalize on evolving consumer trends.
Sales Growth and Same-Store Sales
RH's sales growth trajectory has been modest, with an annualized revenue growth rate of 3.4% over the last four years. However, same-store sales have experienced a concerning decline, averaging a 10% year-on-year decrease over the past eight quarters. This decline underscores the need for RH to reassess its strategy and allocation of capital.
Investor Sentiment and Stock Performance
Following the earnings report, RH's stock experienced a 15.75% increase, reaching $345.08 per share. While the results fell short of expectations, the positive market reaction suggests investor confidence in the company's long-term outlook. With a bullish Relative Strength Index (RSI) of 71.
Cash is King ... not at RH (Bed Bath and Beyond Season II) Restoration Hardware, with its market capitalization of $4.5 billion, has indeed made a mark in the world of interior design. Its commitment to a minimalist and stark color palette resonates well, especially with newly minted bachelors seeking sophisticated aesthetics. The departure of the largest cheerleader presents an opportunity for fresh perspectives and growth.
raring2go.substack.com
In the luxury hospitality and design industry, maintaining a strong financial foundation is essential to support the ambitious vision Restoration Hardware has outlined. The company's ability to effectively manage its leverage while pursuing its growth strategies will be closely watched by both investors and industry observers.
RH Options Ahead of Earnings If you haven`t bought RH here:
Then analyzing the options chain and the chart patterns of RH prior to the earnings report this week,
I would consider purchasing the 320usd strike price Puts with
an expiration date of 2023-9-15,
for a premium of approximately $0.98.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
RH Options Ahead Of EarningsIf you haven`t sold RH here:
Then you should know that looking at the RH options chain ahead of earnings , I would buy the $245 strike price Calls with
2023-4-21 expiration date for about
$15.10 premium.
If the options turn out to be profitable Before the earnings release, I would sell at least 50%.
Looking forward to read your opinion about it.
RH doji candleAfter a big green bar on $RH we see the pullback but then buying pressure to bring it back up.
Since this happened at the lows, I am looking at this with the perspective of a reversal trader.
It is in a demand zone right now and I would like to see the break of $247 for a price target of $257 and then it could go into the $260s and $270s depending on the markets.
RH could be in the $350 - $400 range IMO fundamentally.