Cramer likes Restoration Hardware Holdings on the Dip
A WINNING BUY ON THE DIP
Jim Cramer shares his insight about Restoration Hardware and its stock price
During this round of 2nd quarterly earnings just released, Jim Cramer stated on CNBC Real Money that in his opinion one name stood out from the pack. (RH) Restoration Hardware Holdings, Inc. after reporting earnings Wednesday, June 9, 2021. Jim says “buy the Dip on RH if there ever is one, don’t miss it. Just buy.” —Turns out he was right. See Stock price trading chart below and checkout the 3 month view.
Restoration Hardware Trading Price Chart
What does dip mean for stocks?
"Buy the dip" means purchasing a stock after it has dropped in price. The idea is that the new lower price represents a bargain as the "dip" is likely a short-term price blip and the stock price is more than likely to bounce back to an increased level.
Restoration Hardware Strong Performance
"The winner? Pretty clear.” The company reported 78% revenue growth when the street was looking for 56%. RH core demand, what matters when you are doing apples to apples, increased 109%, “the strongest demand trends in our industry,” as the shareholder letter pointed out.
Gross margins expanded 550 basis points with adjusted operating margins increased 1,260 basis points, to 22.6% versus 10%, Cramer wrote.
RH was up upwards of 6% after the high-end furniture retailer topped analysts' estimates for first-quarter earnings and boosted its forecast for the year, benefitting from the strong housing market.
YTD - Year to Date Stock Performance for Restoration Hardware increased $273
Management also raised its revenue growth guidance for fiscal 2021 to a range of 25% to 30% versus prior estimates of 15% to 20%.
Restoration Hardware 5-Day Performance Report illustrates consistent high performance with a dip July 8th. See Jim Cramer’s tweet above July 1st. Seems he was spot-on
Analyst Coverage on Restoration Hardware (RH)
According to Jim Cramer, Restoration Hardware is “an experience, not a store.” Part museum experience and part architectural show-case. Luxury goods have luxury-high margins.
Located New York City in Meat-packing District
Flagship more an experience, not just a store
18 Wall Street analysts have issued ratings and price targets for RH in the last 12 months. Their average twelve-month price target is $671.00, predicting that the stock has a possible downside of 2.81%. The high price target for RH is $800.00 with the low price target for RH is $450.00. There are currently six hold ratings and 12 buy ratings for the stock, resulting in a consensus rating of "Buy”.
In the END — Final Thoughts
Restoration Hardware (RH) has the opportunity to hit $800 soon combined with the ability to continuously increase margin and attract a luxury buyer with money to spend this is a stock to add on a dip and continue to hold for long-term returns on growth.
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