Shareholders of consumer finance firm Bankrate Inc (NYSE:RATE) and luxury home furnishing company Restoration Hardware Holdings Inc (NYSE:RH) are having a rough day as both stocks fell sharply today, reaching record lows. Let’s take a look and see what analysts have to say about RATE & RH.
Bankrate shares lost almost half of their value today after the company revealed fourth-quarter results that fell short of expectations. In reaction, RBC Capital analyst Rohit Kulkarni downgraded Bankrate shares from Outperform to Sector Perform, while lowering the price target to $9.00 (from $16.00).
Kulkarni commented, “The marginal positive in today’s print was sustained growth in Credit Card consumer inquiries. However, the overriding negative is that RATE’s Q4 results, Q1 guidance, and lack of 2016 guidance underscore an overarching Google disintermediation risk. We still think RATE is a leading online player with a large, secular growth opportunity and an attractive/stable business model (25%+ EBITDA margins & significant FCF). Given the material reduction in guidance, we now lack conviction in the company’s near-term growth outlook, traffic acquisition unit economics, its ability to grow its Banking segment, and its ability to cleanly navigate ongoing Google product changes. Hence, we are stepping to the sidelines.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rohit Kulkarni has a yearly average return of 1.1% and a 47.7% success rate. Kulkarni has an 2.9% average return when recommending RATE, and is ranked #1260 out of 3666 analysts.
Out of the 4 analysts polled by TipRanks (in the past 3 months), 2 rate Bankrate stock a Buy, while 2 rate the stock a Hold. With a return potential of 90%, the stock’s consensus target price stands at $14.20.
Restoration Hardware Holdings Inc
Deutsche Bank analyst Adam Sindler reiterated a Buy rating on shares of Restoration Hardware, while reducing the price target to $60 (from $85), after the company announced preliminary earnings results well below estimates.
Sindler commented, “The quarter was impacted on several fronts including production issues that caused delayed orders and lower than expected volumes from promotions. Comps increased 9% versus guidance of closer to 20%. But excluding the supply issue, which we believe is cyclical and not structural (RH has dealt with this before, though to a much lesser extent given the size of the Modern launch), written orders (orders placed) actually increased closer to 21% which we believe underlies the strength of the core model and Modern.”
“We are further reducing estimates for 2016 and 2017, and are now at $2.90 for 2016 (down from $3.35 which was down from $4.00) and $3.58 for 2017 (down from $4.19 which was down from $4.97). Our long-term growth rate is now 18% 2015 – 2020. The main risk is clearly continued pressure on equity and oil markets,” the analyst added.
According to TipRanks.com, analyst Adam Sindler has a yearly average return of -8.1% and a 36.0% success rate. Sindler has a -19.9% average return when recommending RH, and is ranked #3084 out of 3666 analysts.
Out of the 7 analysts polled by TipRanks (in the past 3 months), 5 rate Restoration Hardware stock a Buy, while 2 rate the stock a Hold. With a return potential of 100%, the stock’s consensus target price stands at $79.43.