On May 28, 2026, we conducted a DCF analysis for W.W. Grainger Inc GWW , a company that has shown a price performance of +24.0% year-to-date and +15.3% over the past year. Despite this positive performance, our analysis indicates that the stock may be overvalued. Here are some key takeaways:
DCF Earnings-based intrinsic value of $940.91 vs current price of $1246.03 (margin of safety: -32.4%) DCF FCF-based intrinsic value of $511.59 vs current price (second opinion indicates significant overvaluation) GF Score™ of 93/100 suggests high reliability of the DCF inputs What Is GWW Worth? DCF Earnings-Based Model In our DCF earnings-based model, we assume a two-stage growth process for W.W. Grainger Inc. The first stage involves a high growth rate for the initial 10 years, followed by a terminal phase with a more modest growth rate. Below are the assumptions used in this model:
Parameter Value Current EPS (TTM, excl. non-recurring) $41.27 10-Year Growth Rate 15.3% 10-Year Treasury Rate 4.49% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% The growth phase (Years 1-10) sees EPS growing at 15.3% per year, discounted at 11%. The terminal phase (Years 11-20) assumes a 4% growth rate, also discounted at 11%. Below is a summary of the calculations:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 15.3%, discounted at 11% $511.69 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $429.22 Intrinsic Value Growth + Terminal $940.91 With a current price of $1246.03 and an intrinsic value of $940.91, W.W. Grainger Inc appears modestly overvalued with a margin of safety of -32.4%. It is important to note that GuruFocus uses EPS without non-recurring items because research shows stock prices correlate more closely with earnings than free cash flow. For further details, visit the GWW DCF Calculator.
What Does the Free Cash Flow DCF Say? When we analyze W.W. Grainger Inc using the Free Cash Flow (FCF) DCF model, we arrive at an intrinsic value of $511.59. This value is significantly lower than the earnings-based intrinsic value of $940.91, indicating a disagreement between the two models. The FCF-based model suggests that the stock is significantly overvalued with a margin of safety of -143.6%.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for W.W. Grainger Inc is $1106.15, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure calculated from historical trading multiples, past business growth, and future performance estimates. While the DCF models indicate overvaluation, the GF Value™ suggests a smaller degree of overvaluation at 12.6%. This discrepancy highlights the importance of considering multiple valuation methods. For more information, visit the GF Value™ page.
What Does GWW's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021). Below is a summary of GWW's GF Score™ metrics:
Metric Rating GF Score™ 93/100 Financial Strength 8/10 Profitability 9/10 Growth 9/10 Valuation 6/10 Momentum 8/10 W.W. Grainger Inc has a predictability rank of 0/5 stars, indicating that the DCF model may be less reliable for this stock. For more details, visit the GWW stock page.
Key Assumptions and Limitations It is important to note that DCF models are highly sensitive to growth rate and discount rate assumptions. Stocks with low predictability ratings, such as W.W. Grainger Inc, produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture future market conditions.
What This Means for Investors In summary, the three valuation models—DCF earnings, DCF FCF, and GF Value™—indicate that W.W. Grainger Inc is overvalued. The earnings-based model suggests a value of $940.91, while the FCF model indicates a much lower value of $511.59. The GF Value™ provides a slightly more optimistic view at $1106.15. Overall, the consensus points towards overvaluation. For the full DCF analysis, visit the GWW DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is GWW's intrinsic value based on DCF?
Answer: earnings-based $940.91, FCF-based $511.59
Is GWW overvalued or undervalued?
Answer: Based on the DCF and GF Value™ consensus, GWW is overvalued.
How reliable is the DCF model for GWW?
Answer: The predictability rank is 0/5, indicating lower reliability for the DCF model.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
On June 03, 2026, we present a detailed DCF analysis for W.W. Grainger Inc GWW . The stock has shown notable price performance, with a year-to-date increase of 26.2% and a 1-year increase of 19.1%. Here are some key points to consider:
DCF Earnings-based intrinsic value of $940.91 vs current price of $1268.36 (margin of safety: -34.8%) DCF FCF-based intrinsic value of $511.59 vs current price (second opinion shows significant overvaluation) GF Score™ of 93/100 indicates high reliability of the DCF inputs What Is GWW Worth? DCF Earnings-Based Model The DCF earnings-based model for W.W. Grainger Inc GWW utilizes a two-stage approach to estimate the intrinsic value of the stock. In the first stage, we project earnings growth over the next 10 years. In the second stage, we apply a terminal growth rate for the following 10 years. Below are the assumptions used in this model:
Parameter Value Current EPS (TTM, excl. non-recurring) $41.27 10-Year Growth Rate 15.3% 10-Year Treasury Rate 4.48% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the growth phase (Years 1-10), we expect EPS to grow at 15.3% per year, which is then discounted at a rate of 11%. The value derived from this stage is $511.69 per share. In the terminal phase (Years 11-20), the growth rate slows to a terminal rate of 4%, also discounted at 11%, yielding a value of $429.22 per share. The summary of these calculations is as follows:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 15.3%, discounted at 11% $511.69 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $429.22 Intrinsic Value Growth + Terminal $940.91 Comparing the current price of $1268.36 with the intrinsic value of $940.91 indicates that the stock is modestly overvalued, with a margin of safety of -34.8%. It is important to note that GuruFocus uses EPS without non-recurring items, as research shows stock prices correlate more closely with earnings than with free cash flow. For a detailed calculation, visit the GWW DCF Calculator.
What Does the Free Cash Flow DCF Say? The free cash flow (FCF) based intrinsic value for W.W. Grainger Inc GWW is calculated at $511.59. When comparing this with the earnings-based intrinsic value of $940.91, we see a significant discrepancy. The FCF model suggests that the stock is significantly overvalued, with a margin of safety of -147.9%. This divergence between the two models highlights the importance of considering multiple valuation perspectives.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for W.W. Grainger Inc GWW is calculated at $1107.49, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure, derived from historical trading multiples, past business growth, and future performance estimates. When we analyze all three models (DCF earnings, DCF FCF, and GF Value™), we find that they generally agree on the overvaluation of the stock. For more information, visit the GF Value™ page.
What Does GWW's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021). Below is the GF Score™ breakdown for W.W. Grainger Inc GWW :
Metric Rating GF Score™ 93/100 Financial Strength 8/10 Profitability 9/10 Growth 9/10 Valuation 6/10 Momentum 8/10 With a predictability rank of 0/5 stars, it indicates that the DCF model may be less reliable for this stock. For more details, visit the GWW stock page.
Key Assumptions and Limitations It is essential to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Additionally, stocks with low predictability ratings, such as GWW's 0/5 stars, tend to produce less reliable DCF estimates. The terminal growth rate of 4% used in this analysis is a simplifying assumption that may not reflect future economic conditions.
What This Means for Investors In summary, the three valuation models (DCF earnings, DCF FCF, and GF Value™) indicate that W.W. Grainger Inc GWW is currently overvalued. The earnings-based intrinsic value of $940.91 and the FCF-based intrinsic value of $511.59 both suggest a significant margin of safety, while the GF Value™ of $1107.49 corroborates this assessment.
For the full DCF analysis, visit the GWW DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is GWW's intrinsic value based on DCF?
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
W.W. Grainger (GWW - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.
The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.
Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.
As such, the Zacks rating upgrade for W.W. Grainger is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
For W.W. Grainger, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.
Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for W.W. GraingerThis seller of maintenance and other supplies is expected to earn $45.34 per share for the fiscal year ending December 2026, which represents no year-over-year change.
Analysts have been steadily raising their estimates for W.W. Grainger. Over the past three months, the Zacks Consensus Estimate for the company has increased 3.9%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of W.W. Grainger to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
Dollar General Corporation (NYSE:DG) stock fell on Tuesday after the company reported first-quarter fiscal 2026 results and updated fiscal 2026 guidance.
The discount retailer posted net sales of $10.79 billion, slightly below the consensus estimate of $10.82 billion.
The sales increase of 3.4% was driven by positive sales contributions from new stores and growth in same-store sales, partially offset by the impact of store closures.
Same-Store Sales Rise On Higher Traffic And Transaction GrowthSame-store sales increased 2.0% compared to the first quarter of 2025, reflecting increases of 1.4% in customer traffic and 0.5% in average transaction amount, including growth in each of the consumables, seasonal, apparel, and home products categories.
"We are pleased with our first-quarter EPS performance, which exceeded our expectations as strong operating margin expansion more than offset the impact of severe winter weather and higher fuel costs," said Todd Vasos, Dollar General's chief executive officer. "Our topline results were highlighted by positive customer traffic and balanced category growth,
Margin Expansion Drives Profit GrowthThe company reported a gross profit margin of 31.6%, an increase of 65 basis points, driven primarily by higher inventory markups and lower shrink and inventory damages; partially offset by increased markdowns and transportation costs.
Operating profit increased 10.8% to $638.5 million compared to $576.1 million a year ago.
Earnings came in at $2.00 per share, topping the Street's estimate of $1.88.
Company Lifts Profit GuidanceDollar General reaffirmed its fiscal 2026 guidance, projecting net sales of $44.31 billion to $44.52 billion, roughly in line with analysts' consensus estimate of $44.43 billion.
The company expects net sales growth of about 3.7% to 4.2% in fiscal 2026, compared with 5.2% growth in fiscal 2025.
Dollar General forecasts earnings of $7.20-$7.45, up from prior guidance of $7.10 to $7.35 per share for 2026, versus the $7.25 per share consensus estimate.
The retailer projects same-store sales growth of approximately 2.2% to 2.7% for the year.
Plans 4,700+ Store Projects In 2026For fiscal 2026, Dollar General reiterated plans to execute approximately 4,730 real estate projects.
These include opening about 450 new stores in the United States and about 10 new stores in Mexico, remodeling roughly 2,000 stores through Project Renovate and about 2,250 stores through Project Elevate, and relocating approximately 20 stores.
DG Stock Price Activity: Dollar General shares were down 2.62% at $107.05 at the time of publication on Tuesday, according to Benzinga Pro data.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
Dollar General's inventory shrink of $928 million was roughly 84% of its $1.1 billion net income in 2024, underscoring merchandise losses as a headwind on profits.
Key Takeaways DG posted Q1 EPS of $2.00, topping estimates, while net sales rose 3.4% to $10.787B.DG's same-store sales grew 2% on higher traffic, with gross margin up 65 bps and operating margin at 5.9%.DG opened 195 stores and remodeled 1,370, and lifted FY2026 EPS view to $7.20-$7.45. Dollar General Corporation (DG - Free Report) reported first-quarter fiscal 2026 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Both net sales and earnings increased year over year, reflecting solid execution of its strategic initiatives, positive customer traffic trends and operating margin expansion, which more than offset the impact of severe winter weather and higher fuel costs. The company witnessed a rise across all major merchandise categories, supported by same-store sales growth and contributions from new stores.
Better-than-expected first-quarter bottom-line performance prompted management to lift its fiscal 2026 earnings view.
More on DG’s Q1 PerformanceDollar General posted quarterly earnings of $2.00 per share, which surpassed the Zacks Consensus Estimate of $1.89. The bottom line increased 12.4% from $1.78 reported in the year-ago quarter.
Net sales of $10,787 million rose 3.4% year over year. Revenues narrowly missed the Zacks Consensus Estimate of $10,822 million. The increase was driven by positive contributions from new stores and growth in same-store sales, partially offset by store closures.
Same-store sales improved 2%, reflecting a 1.4% rise in customer traffic and a 0.5% increase in average transaction amount. The quarter marked positive comparable-sales growth across all major categories, including consumables, seasonal, home products and apparel.
DG’s Key Metrics & Margin InsightsDollar General’s consumables category generated sales of $8,892.5 million, up 3% from the prior-year quarter. Seasonal sales increased 6% to $1,084.3 million, while home products sales rose 3.1% to $523 million. Apparel sales advanced 6.7% to $287.2 million.
Gross margin expanded 65 basis points to 31.6%, benefiting from higher inventory markups, lower shrink and reduced inventory damages, partly offset by increased markdowns and transportation costs.
SG&A expenses, as a percentage of sales, deleveraged 25 basis points to 25.7%. The increase mainly stemmed from higher depreciation and amortization expenses, utilities and property taxes, partly offset by lower incentive compensation.
Dollar General’s operating profit increased 10.8% to $638.5 million. Operating margin expanded 40 basis points to 5.9%.
DG’s Financial SnapshotDollar General ended the quarter with cash and cash equivalents of $1,353.1 million, long-term obligations of $4,563.1 million and total shareholders’ equity of $8,843.3 million.
Net cash provided by operating activities was $716.2 million in the first quarter. Capital expenditures totaled $352 million, including $203 million for improvements, upgrades, remodels and relocations of existing stores, $73 million for new-store facilities, $62 million for distribution and transportation-related projects and $12 million for information systems and technology-related projects.
DG’s Store UpdatesDuring the quarter, Dollar General opened 190 new stores in the United States and five new stores in Mexico. It remodeled 659 stores through Project Renovate and 711 stores through Project Elevate, while relocating six stores.
Management reiterated plans to execute nearly 4,730 real estate projects in fiscal 2026, including about 450 new stores in the United States and 10 new stores in Mexico, nearly 2,000 Project Renovate remodels, approximately 2,250 Project Elevate remodels and about 20 store relocations.
What to Expect From DG in Fiscal 2026?Dollar General raised its fiscal 2026 earnings per share guidance to $7.20-$7.45 from the prior view of $7.10-$7.35. The company continues to expect net sales growth of 3.7-4.2% and same-store sales growth of 2.2-2.7% for fiscal 2026. Capital expenditures are still projected in the $1.4-$1.5 billion range.
Shares of this Zacks Rank #3 (Hold) company have fallen 17.2% in the year-to-date period against the industry’s growth of 8.2%.
Don’t Miss These Solid BetsRoss Stores, Inc. (ROST - Free Report) is one of the largest off-price apparel and home fashion chains in the United States. ROST sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Ross Stores’ current fiscal-year sales and earnings implies growth of 8.2% and 15.6%, respectively, from the year-ago reported figures. ROST delivered a trailing four-quarter earnings surprise of 10.2%, on average.
Casey's General Stores, Inc. (CASY - Free Report) is one of the leading convenience store chains in the United States. CASY currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Casey's current fiscal-year sales and earnings calls for growth of 8.7% and 24.3%, respectively, from the year-ago reported figures. CASY delivered a trailing four-quarter earnings surprise of 20%, on average.
Tyson Foods, Inc. (TSN - Free Report) operates as a leading protein company producing chicken, beef, pork and prepared food products. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.5%, while the consensus mark for earnings indicates a 0.5% increase from the year-ago reported figures. TSN delivered a trailing four-quarter earnings surprise of 18.1%, on average.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$95.11▼
$158.23Dividend Yield2.05%
P/E Ratio16.25
Price Target$131.27
Dollar General’s NYSE: DG market has hurdles to overcome, but it is only a matter of time until it does. The company's decision to pause share buybacks, focus on growth, and improve the balance sheet is paying off.
Dollar General is reducing debt, invigorating growth, and is on track to sustain improvement through year’s end, and the impact is reflected in the price action. The stock price is at generational lows, trading at a deep discount, while it quietly signals a reversal. The long-term monthly chart shows a nearly complete Head & Shoulders pattern, suggesting robust stock price increases ahead.
Get Dollar General alerts:
The Head & Shoulders is a powerful pattern reflecting a market in transition. The question is whether this market will transition from a downtrend to an uptrend or remain range-bound. Assuming the worst, Dollar General’s stock price could rebound by as much as 60% from the critical support level and still be within the range. The best-case scenario is that Dollar General advances by 60%, tests resistance at the pattern’s neckline, and then continues to move higher.
The Q1 earnings release and the guidance update for fiscal 2026 gave the market exactly what it needed—proof of accelerating earnings growth—which is a reason to believe this stock will keep increasing over the long term.
Dollar General’s Mixed Results Were Strong Where It Matters MostDollar General issued a mixed Q1 report with revenue falling short of MarketBeat’s consensus estimate. The miss, however, was slim and offset by seasonal factors including weather impact and strong margins. Even so, the $10.8 billion in net revenue is up 3.5% compared to the prior year, only 20 basis points (bps) weaker than expected, driven by store count and comps. Comps increased by 2%, driven by a 1.4% increase in traffic and a 0.5% increase in average check, with strength across categories.
Margin details were the strongest. Dollar General’s inventory rationalization, improving store traffic, and operational improvement drove a 60 bps improvement in gross margin. The improvement was only partially offset by higher expenses, resulting in accelerated earnings growth relative to the top line. Critical details include the 13.3% increase in net income and 12.4% improvement in diluted earnings per share (EPS), more than 625 bps better than expected and compounded by hot guidance.
The guidance is equally mixed and bullish for the market. The company reaffirmed its full-year revenue targets despite a weak Q1, underpinned by expectations of 2.5% comp-store growth and wider margins. While the revenue target was reaffirmed, management raised its full-year earnings target by 10 cents at the midpoint, putting it about 10 cents above consensus. The likely outcome is that Dollar General continues to gain traction and outperforms as the year progresses.
Dollar General’s Balance Sheet Strengthens: Investors Gain ValueThe only downside to Dollar General’s strategy is its pause in share buybacks, implemented to preserve capital. The upside is that cash flow is improved, the cash balance is growing, debt is falling, equity is rising, and dividends are still paid. The Q1 result was a nearly 14.75% equity gain, which more than offset the slight rise in share count. The likely outcome for fiscal 2026 is that Dollar General continues to gain traction, driven by its growth reinvigoration and balance sheet strength, and eventually resumes buybacks, possibly as soon as next year. The dividend is safe, amounting to less than 40% of earnings.
Overall MarketRank™89th Percentile
Analyst RatingHold
Upside/Downside14.1% Upside
Short Interest LevelHealthy
Dividend StrengthModerate
News Sentiment0.69 Insider TradingN/A
Proj. Earnings Growth7.99%
See Full Analysis
The initial analyst response following the release was cautious, but suggests a turning point is at hand. The first update to be released was a reaffirmed rating and price target from Telsey, which pegs the stock at Market Perform with a $140 price target. The rating and target align with broader analyst sentiment, which pegs the stock as a Hold with a 41% Buy-side bias and a $140 price target, implying a 30% upside over the subsequent 12 months. Institutions are likewise bullish, having accumulated over the trailing 12 months and owning more than 90% of the stock.
Dollar General’s primary risk is high gas prices and inflation, which put pressure on its core consumer. While trade-down economics are helping growth today, rising inflation continues to erode spending power in the core demographic and threatens to undermine the outlook. Meanwhile, big-box competitors like Walmart NASDAQ: WMT continue to gain traction in the dailies and consumables categories. The primary catalysts for this stock include lower oil prices and interest rates. Either will take pressure off consumers throughout the stack. In the meantime, DG will continue leaning into store count expansion, remodels, and relocations.
Should You Invest $1,000 in Dollar General Right Now?Before you consider Dollar General, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Dollar General wasn't on the list.
While Dollar General currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link to see MarketBeat's list of seven best retirement stocks and why they should be in your portfolio.
Dollar General Corp (DG) Q1 2026 Earnings Call Highlights: Strong Sales Growth Amid Economic Challenges Dollar General Corp (DG) reports a 3.4% increase in net sales and a 12.4% rise in EPS, driven by strategic initiatives and robust customer traffic. Summary
Net Sales: Increased 3.4% to $10.8 billion.Same-Store Sales: Increased 2%, driven by customer traffic growth of 1.4% and average basket growth of 0.5%.Gross Profit Margin: 31.6%, an increase of 65 basis points.SG&A as a Percentage of Sales: 25.7%, an increase of 25 basis points.Operating Profit: Increased 10.8% to $638.5 million, with a margin of 5.9%.Net Interest Expense: Decreased to $47.2 million from $64.6 million.Effective Tax Rate: 24.9%, up from 23.4% in the prior year.EPS: Increased 12.4% to $2.Cash Flow from Operations: $716.2 million.Merchandise Inventories: $6.6 billion, flat compared to the prior year.New Store Openings: 190 new stores in the US.Dividend: Quarterly cash dividend of $0.59 per share for Q2 2026.
Release Date: June 02, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points Dollar General Corp DG reported a 3.4% increase in net sales to $10.8 billion for the first quarter of 2026.Same-store sales increased by 2%, driven by a 1.4% growth in customer traffic and a 0.5% increase in average basket size.The company achieved a gross profit margin of 31.6%, an increase of 65 basis points, due to higher inventory markups and lower shrink and damages.Dollar General Corp (DG) saw significant growth in its Value Valley program, with an 18.4% comp sales increase, highlighting strong performance in health and beauty.The company is expanding its delivery options, contributing approximately 70 basis points to comp sales growth, with 80% of orders delivered in one hour or less. Negative Points Higher fuel costs negatively impacted results, although strong operating margin expansion offset some of this impact.The core customer remains financially constrained due to higher fuel prices and reductions in SNAP benefits.SG&A expenses increased by 25 basis points as a percentage of sales, driven by higher depreciation, utilities, and property taxes.The effective tax rate increased to 24.9% from 23.4% in the prior year, primarily due to the expiration of the Work Opportunity Tax Credit.Dollar General Corp (DG) anticipates modest SG&A deleverage for the full year 2026, even as it plans to accelerate investments in key initiatives. Q & A Highlights Q: Todd, could you elaborate on the consistency of comps despite the backdrop with positive comps? Have you seen any change in trends in May to kick off the second quarter? And how do you believe gas prices, if they remain elevated, will impact your results?
A: Todd Vasos, CEO: We started Q1 with negative comps due to store closures from severe weather, but saw strong performance in the remaining weeks. This trend continued into May, indicating a strong start to Q2. Elevated gas prices have historically led to increased trade-in from higher-income customers, and we are seeing this again. We are focusing on value and convenience to capitalize on this trend, with targeted promotions and maintaining a strong $1 price point.
Q: Are you seeing evidence of increased competition in the consumable retail space, and how do you expect this to play out over the next few quarters?
A: Todd Vasos, CEO: Our promotional activity is proactive and targeted, not reactive. We are focusing on value, which is resonating with customers across all categories, including non-consumables. We expect others may try to catch up, but our strong everyday pricing and targeted promotions should continue to drive traffic and growth.
Q: Could you help us understand the cadence of margins as you start to lap tougher shrink comparisons, and what gives you confidence in achieving long-term gross margin targets?
A: Donny Lau, CFO: Q1 gross margin improved by 65 basis points, driven by higher markups and lower shrink and damages. We expect continued improvement in shrink and damages, along with growth in our DG Media Network and other initiatives. These factors give us confidence in achieving our long-term gross margin targets.
Q: How do you view the potential for top-line growth to normalize closer to 3% versus the 2% seen recently?
A: Todd Vasos, CEO: We are confident in our ability to drive top-line growth within our long-term framework of 2% to 3%. The balance of consumables and non-consumables, along with our delivery initiatives, supports this growth. Our delivery program is highly incremental and profitable, contributing significantly to our comp sales growth.
Q: Can you discuss the impact of $1 items on basket size and labor hours, and how you manage this with increased volume?
A: Todd Vasos, CEO: The $1 price point is an add-on to the basket, especially at the beginning and end of the month. It helps customers balance their budgets and is a key part of our value proposition. We manage labor hours effectively to handle increased volume without compromising efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
There's a lot of pride that comes with working hard for your money, but the ultimate goal should always be to make money in your sleep. There are many forms of passive income, but the easiest form for most people is through dividends. All it takes is purchasing shares of dividend-paying stock, regardless of the size of the purchase.
If you're looking for two stocks that can provide a lifetime of passive income, the following two options are great choices. They both approach dividends differently, but have a track record of being shareholder-friendly and prioritizing dividend payouts.
Image source: Getty Images.
1. Realty Income Realty Income (O +1.23%) isn't your typical company; it's a real estate investment trust, better known as a REIT. A REIT is a company that owns and operates income-producing real estate, ranging from office to residential to hospitality to healthcare to data centers, and more.
Realty Income owned 15,571 properties at the end of the first quarter (Q1), with most leased to grocery stores (11% of its collected rent), convenience stores (9.4%), and home improvement stores (6.4%).
Today's Change
(
1.23
%) $
0.76
Current Price
$
62.67
The company's business model is unique (and lucrative): It buys the real estate, rents it out to companies, and those tenants are responsible for paying the property taxes, insurance, and general maintenance. This contrasts with most other rental cases, where the landlord would be responsible for them.
Who Realty Income leases to matters a lot. Its tenants aren't seed-round start-ups; they're typically businesses in industries that thrive regardless of economic conditions, providing Realty Income with reliable rent income and keeping its vacancy rate low. Its top three clients are Dollar General, 7-Eleven, and Walgreens.
Because REITs are structured, Realty Income is required to return 90% of its taxable income to its shareholders. It has a monthly dividend, which works well for those who want their passive income more frequently. Depending on how much you eventually invest in it, its payouts can work somewhat like paychecks.
O Dividend Yield data by YCharts
Realty Income routinely has a high dividend yield, but its consistent increases make it a better long-term investment. In March, Realty Income announced its 114th consecutive quarterly dividend increase, and I expect this streak to continue for the long haul.
2. Procter & Gamble Procter & Gamble (PG +0.86%) (P&G) is one of the more surefire dividend stocks on the market. It's a Dividend King (a company with at least 50 consecutive years of dividend increases), having increased its dividend for 70 straight years -- the fifth-longest streak on the market.
The key to P&G's sustained success is selling products that sell regardless of economic conditions. It owns household-name brands such as Tide, Pampers, Crest, Bounty, Tampax, Gillette, Old Spice, and dozens of others. Regardless of whether the economy is flourishing or in a recession, people have to brush their teeth, wash their bodies, clean their clothes, clean their homes, and keep up with feminine care.
Today's Change
(
0.86
%) $
1.27
Current Price
$
149.61
At its size, P&G won't be a company that consistently grows revenue by double-digit percentages, but it'll be a reliable cash cow. In its most recent quarter (ended March 31), P&G generated $21.2 billion in sales, up 7% year over year. Its operating cash flow (cash from its core operations) was $4 billion, more than enough to cover the $2.5 billion in dividends it paid out in the quarter.
PG Revenue (Quarterly YoY Growth) data by YCharts
You don't invest in P&G in hopes of "Magnificent Seven" stock-like returns; you do it because you know you never have to second-guess its attractive dividend. Its current dividend yield is nearly 3%, a bit above its 2.5% average over the past five years. It's a two-for-one benefit: an above-average dividend yield and an all-but-guaranteed annual increase.
Part of having passive income is not having to think too much, and P&G's stock (and dividend) lets you avoid just that.
HomeIndustriesRetail/WholesaleEarnings ResultsEarnings Results‘This pressure has been more pronounced on customers in rural communities as they work to minimize trip distance,’ discount retailer’s CEO saysPublished: June 2, 2026 at 4:40 p.m. ET
As the Iran war drives up gas prices, retailers like Walmart have said consumers are buying less gas per trip to the pump. Now, signs are emerging that lower-income and rural shoppers are buying less food — in part because long drives are getting too expensive.
Discount chain Dollar General DG, which draws a lot of lower-income consumers who have been hit harder by the past several years of inflation, said Tuesday that as average gas prices have climbed above $4 a gallon, more of its core shoppers are pulling back.
Dollar General’s core customers are cutting back on food purchases and other household expenses due to rising gas prices and reductions in SNAP benefit payments, CEO Todd Vasos said Tuesday (June 2).
“This pressure has been more pronounced on customers in rural communities as they work to minimize trip distance and make trade-offs in their search for everyday affordability and value,” Vasos said during the company’s first quarter earnings call.
Dollar General is meeting the needs of these and other customers with a combination of value and convenience, Vasos said. He highlighted the company’s 21,000-store footprint, growing delivery presence, pricing position that is within three or four percentage points of mass retailers, and selection of more than 2,000 items at or below the $1 price point.
During the first quarter, Dollar General saw year-over-year increases of 3.4% in net sales, 2.0% in same-store sales, 1.4% in customer traffic and 0.5% in average transaction amount. Its same-store sales included growth in each of the company’s four categories: consumables, seasonal, apparel and home products, according to a Tuesday earnings release.
Vasos said during the call that the company also saw growth in customer penetration across all income cohorts, including low-, middle- and high-income segments, as an increasing share of consumers seek value.
“Notably, across these cohorts, the largest increase in customer count came from the highest-income segment, which earns more than $100,000 annually, contributing to a significant increase in trade-in customer households during the quarter,” Vasos said.
Advertisement: Scroll to Continue
“We know that value and convenience are always important to our customers, but even more so right now,” Vasos added.
The Federal Reserve Bank of New York published research Wednesday (May 27) that said lower-income Americans are facing high levels of economic insecurity and financial strain.
“We find a remarkable increase in food insecurity, particularly among lower-educated and lower-income households and households with young children,” New York Fed researchers wrote.
The latest Consumer Price Index report from the Bureau of Labor Statistics, released May 12, showed inflation rising 3.8% year over year in April, while prices increased 0.6% month over month, marking the strongest monthly inflation gains since October 2022.
Key Takeaways DG posted 2.0% same-store sales growth, driven by a 1.4% traffic increase and a 0.5% ticket gain.DG raised 2026 EPS guidance to $7.20-$7.45 and expects 2.2%-2.7% same-store sales growth.DG said delivery added 70 bps to comp growth and completed 1,370 remodels during Q1. Dollar General Corporation (DG - Free Report) used its first-quarter 2026 earnings call to make a forward-looking case centered less on the headline beat and more on execution. Management stressed that traffic growth, margin expansion and tighter inventory control offset weather disruptions and higher fuel costs.
That message mattered because the company also raised its full-year earnings outlook, while using the call to argue that its value positioning, delivery buildout and remodel program are gaining traction in a pressured consumer environment.
Dollar General Sees Pressure Drive TrafficChief executive officer Todd Vasos said the quarter showed Dollar General’s ability to serve a more financially constrained shopper while also pulling in higher-income trade-in customers. He highlighted same-store sales growth of 2.0%, driven by a 1.4% increase in traffic and a 0.5% rise in average ticket.
Vasos said all four merchandising categories posted positive comparable sales for the fifth straight quarter, with non-consumables again outpacing consumables. He also said March benefited from the Easter shift, while February was hurt by winter storms and temporary store closures.
A notable call theme was trade-in behavior. Vasos said customer penetration rose across income groups, with the biggest increase coming from households earning more than $100,000, while core lower-income shoppers remained under pressure from fuel prices and reduced SNAP benefits.
DG Leans on Margin and Inventory GainsChief financial officer Donny Lau framed the quarter as proof that multiple margin initiatives are working at once. Gross margin rose 65 basis points to 31.6%, helped by higher markups, lower shrink and lower inventory damages, partly offset by higher markdowns and transportation costs. Operating margin expanded 40 basis points to 5.9%.
Lau said shrink mitigation remained a major contributor, with shrink improving 28 basis points from a year earlier, even against a tougher comparison. He also pointed to better in-store execution on damages and supply chain productivity as support for the company’s longer-term margin framework.
The financial backdrop was solid enough to support an earnings beat despite a revenue miss. DG reported earnings per share of $2.00, topping the Zacks Consensus Estimate of $1.89 by 6.06%. Revenues of $10.79 billion missed the Zacks Consensus Estimate of $10.82 billion by 0.33%. Merchandise inventories were essentially flat year over year at $6.6 billion and down 1.6% on a per-store basis.
Dollar General Raises 2026 ViewManagement raised full-year 2026 earnings guidance to $7.20 to $7.45 from $7.10 to $7.35. Lau said the higher range reflects first-quarter outperformance, the balance-year outlook and a lower expected tax rate of about 24.5%.
The company now expects net sales growth of 3.7% to 4.2% and same-store sales growth of 2.2% to 2.7%. Capital spending guidance remained unchanged at $1.4 billion to $1.5 billion, and the outlook still assumes no share repurchases this year.
Lau also said the guidance excludes any effect from potential tariff refund payments. He acknowledged continued uncertainty around consumer behavior and elevated fuel costs, but said management still sees more gross-margin tailwinds than headwinds over the rest of the year.
DG Builds Around Delivery and RemodelsBeyond the quarter, management used the call to emphasize initiatives designed to widen the company’s convenience advantage. Chief operating officer Emily Taylor said delivery sales contributed about 70 basis points to comparable-sales growth in the quarter, with larger baskets and strong repeat usage supporting the economics.
Vasos said the company is now delivering from about 18,000 stores through myDG and third-party partners. Taylor added that most orders reached customers in an hour or less, which management sees as a differentiated proposition in rural markets.
Store refreshes were another focal point. Dollar General completed 659 Project Renovate remodels and 711 Project Elevate remodels in the quarter, while maintaining its target for 2,000 Renovate and 2,250 Elevate projects for the year. Management continues to target roughly 6% annualized comparative sales lift from Renovate and 3% from Elevate.
Dollar General Defends Promotions in Q&AAnalyst questions focused heavily on the durability of traffic gains and whether a more promotional retail backdrop could pressure profitability. Vasos told analysts from UBS and Barclays that the company’s added promotions were planned, targeted and proactive rather than reactive, with an emphasis on supporting the core customer and retaining newer trade-in shoppers.
Management also pushed back on the idea that sharper pricing activity signals weakening fundamentals. Vasos argued that Dollar General already holds a strong everyday value position and said the $1 price point, including Value Valley, remains central to both customer acquisition and basket-building behavior. He said Value Valley comparable sales rose 18.4% in the quarter.
Questions from Bernstein and Piper Sandler pressed on margin durability as shrink comparisons get harder and fuel stays high. Lau said the company expects continued, though more modest, gross-margin improvement through the year, supported by shrink, damages, media network growth, category management and supply-chain efficiencies.
DG Leaves the Call With a Clear PlaybookThe overall tone of the call was confident but measured. Management repeatedly tied the quarter’s performance to controllable execution rather than a friendlier backdrop, emphasizing value, convenience and operational discipline as the core levers for the rest of 2026.
Just as important, executives used the Q&A to reinforce that the company sees room to grow sales, traffic and margins at the same time, even with macro pressure still evident across its customer base.
Zacks Signals Point to Mixed Near-Term TraitsDG carries a Zacks Rank #3 (Hold), along with a Value Score of A, Growth Score of A, Momentum Score of F and VGM Score of A. Under Zacks methodology, a stronger Style Score can help identify attractive value and growth characteristics, while the weak Momentum Score points to less favorable price-trend support.
A Zacks Rank #3 does not carry the same favorable setup as a Zacks Rank #1 (Strong Buy) or 2 (Buy), even when Style Scores are strong. The combination suggests balanced fundamental traits but a less decisive near-term signal, and that rank can still change as earnings estimate revisions adjust after the quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:
Dollar General’s earnings.Has Dollar General turned the corner?Investing in turnaround stocks: What to look for?Citron Research’s Andrew Left found guilty of securities fraud.The value of short-selling research.The “ickiness” of the short-seller business model.Listener question: Are crowdfunded real estate funds worth it? What to look for?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.
A full transcript is below.
This podcast was recorded on June 2, 2026.
Tyler Crowe: We're talking short sellers and turnarounds today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors, Lou Whiteman and Matt Frankel. We're going to be getting into short sellers, specifically short-selling research firms, after the court decision that came down on Citron Research earlier yesterday. We're also going to look at investor questions related to real estate on the private side, not necessarily reads that we normally talk about on a publicly traded entity show.
But first, we're going to start with Dollar General. I wanted to bring this one up specifically because it's been a turnaround story for several years. It's not the most headline-grabbing company. But during the 2010s, Dollar General was one of the best-performing stocks. It handily beat the S&P 500. Companies that we think of now like Mag 7 companies like Microsoft and Alphabet, Dollar General was beating it. That came to a crashing halt right around 2022 as trouble started to pile up for various reasons, and the company's been trying to get its act together for a while now. This morning, it just reported earnings, and the numbers said they beat expectations and raised guidance, and yet the stock is down about almost 3% as we're taping this. Matt, was this a good result, or was it just beating bad expectations for what is now a downtrodden stock?
Matt Frankel: Well, Dollar General, you're right. They beat expectations on earnings. On revenue, they missed expectations a little bit. It wasn't all good. Same-store sales, for example, grew 2% year over year. That's less than the rate of inflation, so on a real basis, they actually lost same-store sales. On the other hand, their margins look good. Gross margin rose 65 basis points, net income increased by 13%, and as you mentioned, earnings beat expectations. It missed slightly on the top line, beat on the bottom. I'm not shocked that the stock is under pressure. The company is making good progress on its plan to renovate and improve its existing stores, which is a big cornerstone of their turnaround plan. They did 1,400 of them in the first quarter alone, they're aiming for a little over 4,200 for the entire year. They continue to open stores when they see opportunities. Almost 200 new stores were opened during the first quarter. They maintained their revenue guidance for the full year, but they raised their earnings guidance. I'd say things are going OK. They're not going great, but they're going OK.
Lou Whiteman: Maybe the market debate is in the word good in good progress. Because, yes, there's definitely making progress here. This is a promising start to what figures to be a long-term turnaround. They were beaten, rightfully so, I may add, and the market right now, I don't think they want to celebrate just one quarter of a turnaround. They have an ambitious plan. There's nothing in this quarter to suggest that there's anything wrong with the plan, but competition is intense here. In retail, there is no guaranteed winner. You are not entitled to continue to exist, so there is real downside risk. Turn around, still early days. I think you give credit where credit is due, but I think the market's right to be cautious here and not to just be cheering just because of one quarter's results.
Tyler Crowe: I feel like the three of us have been in the same experience here for a while, where I've been to a few value investing conferences over the past few years, and I think I've heard so many Dollar General pitches at these value investing conferences. I feel like I could set my watch to it and almost do the whole pitch by memory now. It all had struck the exact same chords. It was former CEO Todd Vasos is now back in charge again after, that 2020, 2010 run-up, and he's the one in charge again. The stuff that's a problem, it is fixable. If you focus on the current store fixing, like you were talking about, Matt, in the most recent numbers, instead of really trying to blow out your store account, which was part of the growth’s narrative and why it was so successful, all these things happened, and boom, we're back at two times price-to-sales ratio, eight times book value. Some of these things are coming true. Sales continue to grow, margins are improving. But at the same time, that valuation standpoint, it hasn't come anywhere close to it. We're still less than one times sales. I think book value is something like 2.5 times book. The valuations way different.
This is the challenge, in my opinion, of investing in turnarounds, and I wanted to use Dollar General as a good example here, but we could have done Advance Auto Parts or the 15 other long-term turnarounds that sometimes have not quite gotten off the ground. It's not just a bet on the fundamentals of the business returning. It's also the narrative that drives that valuation of what people think about it. I know I certainly have touched the hot stove a couple of times. I don't even know if I can mention some of them because they're so small these days that I think we can move the stock, so I don't even want to mention them because they're in such bad shape. But with that in mind, one, if you want to share any turnaround bets that you made that didn't go awry or did, and what advice would you give to investors when it comes to actually investing in these turnaround ideas or fallen angels like Dollar General?
Matt Frankel: Of course, every turnaround story is different. But there are some common themes. For me, leadership is the most important variable. I typically want a CEO that's done it before, not that's run the company before, but has executed a turnaround before. Unity Software, you asked for an example, is one that I can think of off the top of my head. Their current CEO Matt Bromberg, formerly led the turnaround at Zynga, the gaming platform, so he's done it before. The balance sheet needs more than enough money to execute on the turnaround. You don't want to be raising capital while the company's down. I'll almost never invest in a turnaround from the start. I want at least some evidence, a few quarters of numbers moving in the right direction that show that it's working. I want to see things like same-store sales growth and after inflation, like in Dollar General's case, margin trends, customer accounts growing, things like that. That's what I look for.
Lou Whiteman: First off, I think it's so important to look at the competition just as a society. It’s definitely true here is that, look, a company that has fallen from grace or lost the customer’s eye, if you’re a consumer-facing company, you can execute very well, and it can be hard to get back on the radar, get back in good graces with the customer. I think that is a huge wildcard that you have to look out for here. But generally speaking, Tyler, I think you hit on it. Narrative is so important. We are surrounded by data. The market knows everything that's going on at any given time these days. The hard part is knowing when the market will care about the data. A lot of sharp moves we see, and this is a Dollar Tree thing. This is anywhere, but a lot of sharp moves, it's not because there's some new surprise. It's just we suddenly started caring about something we already knew about. Look at the SaaS apocalypse. We've known what AI wanted to do forever, but suddenly, this was cutting 50% off the price of the stocks because suddenly we actually cared about it. It was in our consciousness. In a turnaround story, the only antidote to narrative is patience. If the turnaround is working, if the data looks good, the market will catch on eventually. But that eventually can take a long time. It's really hard to know when, so patients can be needed.
Tyler Crowe: I find it funny because you said Dollar Tree instead of Dollar General, but I actually feel like this whole segment could have been done with Dollar Tree instead of Dollar General. We might have come to the same conclusions. But before I go, anybody want to touch the hot stove, like a turnaround that worked for you in your portfolio, one that flamed out, didn't quite work out?
Lou Whiteman: I'll do one of each and that bottom at the same time, which is, again, to show you that they don't all work out. I bought Garrett Motion and Simply Good Foods at the same time. One of them, I think, is a 3X now, and one of them is down 60%. I like both equally, going in.
Matt Frankel: Tyler, you're betting on Transocean's turnaround with me, so I'll just leave it at that.
Tyler Crowe: Coming up after the break, we're going to get into the muddy waters of short-selling.
ADVERTISEMENT: It's not just that companies become too big to fail, and we bail them out, although that's happening. It's not just they become too big to jail, but they become too big to care. These companies, they eliminated the competition. They and their advisors, the economists who said monopolies are good and efficient, they're today just absolved of all responsibility. Shopping really hard doesn't solve monopolies. We warned them at the time. They did it anyway. The Ishigogenic policy environment is what created this. Do you hear why the Internet keeps getting worse? Check out episode 1280 of the Jordan Harbinger show.
Tyler Crowe: Let's talk about short-selling and short-seller research firms in general. This isn't a topic we explore much here because I'm using the Royal "we" of The Motley Fool, not necessarily the three of us. We don't normally short stocks. Yes, me, I sometimes use options like put options for income or buying a stock at a set price instead of doing price limits. But I think I can speak for the three of us when we say I don't think any of us go out and say, the company's no good. I'm short of stock or short stocks in our portfolio. Matt, Lou, do either of you guys do that?
Matt Frankel: I don't want to say that I've never shorted a stock. I'm sure back in my early days, before I knew how to invest, I did. But I can't really remember the last time. On occasion, I'll set up option spreads or something like that that could profit if a stock I consider frothy were to go down. But even that's rare.
Lou Whiteman: I stopped a long time ago. It's just too much work.
Tyler Crowe: The work is key here. We’re talking about this one specifically because yesterday, Andrew Left, of the short-selling research firm Citron Research, was found guilty of securities fraud. It was actually 13 of 17 counts, and I think one of them carries a maximum prison sentence of 25 years. I don't know if he's going to get 25 years, but there is some real penalties going on here. Basically, the thesis on the court case was he was using his followership on social media and elsewhere to disseminate his research and manipulate stock prices to profit from it. Now, I wanted to bring this to the table because I have some real conflicting thoughts about this as an investor, and also what we do in financial media. For all the flak that most investors give to short sellers for a myriad of reasons, some good, maybe some not, I think there's some real value to short sellers, and short-seller reports, like the ones that Citron Research have done in the past. Do either of you agree with me here, or am I standing on an island?
Lou Whiteman: Absolutely. No, I'm 100% pro short sellers. I will say they vary in quality, just like longs, that's not exclusive to the short. I don't know, and we'll get into it, I don't know if I can be pro-Andrew Left here, but definitely short sellers need to exist.
Matt Frankel: I would agree with that. There's a solid case to be made that short sellers are a vital part of the stock market. There’s a lot of academic research out there that shows that short sellers improve price discovery, reduce the average duration of miss pricing, i.e, bubbles, and cause less impactful crashes than otherwise would happen. Short sellers have legitimately been the first to identify fraud many times. Think of Nikola, for example.
Tyler Crowe: To that point, too. Lou, like you were saying, not necessarily the biggest fans of Andrew Left, but Citron Research were some of the first ones to point out with all the accounting shenanigans that were going on at Valiant Pharmaceuticals. I think it was back in 2015. I think within days of that Citron Research report, Valiant was making drastic changes to its business, talking about dissociating itself from some of the pharmacies that it was working with because there was accusations that they were using those pharmacies for overcharging. It was a pretty clear-cut fraud case that Citron brought to everyone's attention here. It was good and important work. To your point, Matt Nikola was a great one. While this technically wasn't a short report, John Carreyrou's work on Theranos was in that same spirit. I think, had Theranos gone public without some of that work, I'm sure they would have made it even worse. We the market, we sometimes need people on the lookout for the bad stuff for the Valiants, for the Nikolas and stuff like that, or otherwise, they can perpetuate and get even worse. Now, with all of that said, and this is where it starts to get conflicting, there is something that's definitely icky about the business model for many short sellers. The verdict during this Citron Research court decision is where some of that icky business practices started to come to light, and I think that's why we're like don't really know if I want to stand up for Andrew Left here.
Matt Frankel: The big takeaway, it's not that publishing short research is inherently bad. It's not. But misleading investors is, and it's not just Citron that does it. Muddy waters, which you mentioned earlier in the episode, at least they say this, but they include a line in every short report that says, Upon the publication of each report, we intend to begin covering a substantial majority of our short positions. They go on to say, “You agree and understand that by the time you read a report on this website, we may be covering or have already covered, i.e., bought back our short position.” This is where I have a problem. They're aiming to profit at publication and don't plan to stick around to see if their short thesis was actually right. Always read short reports on stocks you own. Don't get me wrong. It's always worth listening to the bear case to every stock you own. Even reports where the seller just aims to make a quick buck, like those, they often contain real concerns that are worth investigating. Now, Citron's general process, and this came out in the trial, was to identify a target, quickly establish a short position in it, coordinate some timing, and publish an attention-grabbing claim, either a tweet or an article, watch retail investors panic and react, sending the stock lower, and then cover into the short without disclosing it in most cases.
Lou Whiteman: One real big objection to what Matt said. I don't think that there is anyone who honestly believes that every person that goes on CNBC, Bloomberg, or something, and says, I think such and such is great is committing to a timetable. If anything, Matt, like you say, at least the shorts admit this, there is nothing stopping anyone from saying on a tweet, on television or anything, I think Stock A is going to the moon, see it go up 5% and sell it right away. There are, I should say that for some of us, like some companies choose to put restrictions on what people can say and then act on. Motley Fool does that. I'm all for it because I agree that's not ethical, but to say that this is just some short thing, that they say something about a company and then sell off, that happens all of the time, and it feels like crocodile tears to get too caught up on it, just shorts do it. What I have a problem with, and again, I want to be careful because, I guess, the jury has ruled, but it is still allegedly, allegedly from the prosecution, is the idea that Left was basically marketing his reputation to sympathetic hedge funds and coordinating takedowns. That's where you sort of cross the line. There's email quotes about, all I have to do is go on, say something, and it'll be like taking candy from a baby. I do think that there should be some standard of conviction to your words that you should actually be going in with a thesis. But look, if my thesis is that this company is overvalued, and I think it's going to go down from here. I say that loudly enough, and it goes down. Whether it takes 20 minutes or two years, why shouldn't I cover there? The act that they do that just because they're on the downside, betting on things going down seems just as fair to me as betting things go up. I just don't think you should be conspiring with other people to manipulate stock prices, which is what was implied with Left here.
Tyler Crowe: I'm going to do a shameless plug here for the Motley Fool. You know what? It's our podcast. I like to do that sometimes. We get some stocks right. We get some stocks wrong. But one of the things that you were mentioning, we do have a pretty robust disclosure and no trade policy. If we know that a stock is going to be recommended weeks in advance, we're not allowed to trade it. If we talk about or write about any of the stocks that you hear us talking about on this podcast, we can't trade them for multiple days, and that's part of the process. I think at least for me, and I'm sure that you two agree on this to a certain degree, it's one of the reasons I've enjoyed working for The Motley Fool for a long time is because we get some things right. We get some things wrong. We can't say that we're perfect, but I think there's a level of transparency and disclosure when it comes to things like this that separates us to a certain degree from the Citron Research, publishing something and then immediately trading on it afterwards.
Lou Whiteman: It should be said, Tyler.
Tyler Crowe: Go ahead.
Lou Whiteman: That's more the exception than it is the rule, which is why all of the hand-waving about shorts, this happens unfortunately a lot on both sides on Wall Street. If we really care about it, we should really start looking at every tweet pumping a stock as well.
Tyler Crowe: Well, there's only so many Wall Street ethics episodes we can do here on the podcast. But every once in a while, we're going to do our standing on our soapboxes, and this is probably one of them. Coming up after the break, we'll do listener questions. That's. Hey, everyone, quick reminder, if you want to get your questions in, we love answering them. Just send them over to [email protected]. That's [email protected]. The three requests we always ask is number one, keep it Foolish. Two, keep it short enough if I can read on air, and three, we can't give personalized advice, so always ask generic questions. What would an investor do, or what do you think about a stock? We can't necessarily tell you what you should do with your portfolio. We don't want to get in trouble with the SEC, like Andrew Left did.
With that in mind, here is the question from Matt. Hi, Motley Fool team. I have questions about whether syndicated crowd-funded private equity and real estate should have a place in my portfolio. Basically, the rest of it goes, Could you share your thoughts on how to safely invest in and evaluate these funds? What specific red flags or metrics should I look out for as I compare for them? Thanks for all the great content. Lou, I want to start with you, private equity, real estate. This was a really popular thing. I think 2019, 2020, where a lot of the regulations change where instead of having to be what was called an accredited investor, where you had to have enough either money or income to invest at a certain level, they brought down those thresholds and made, what they said was democratizing private equity. It's had some mixed results, and I think that's what we're getting at here. When you're looking at this particular part of the market, what are you looking for?
Lou Whiteman: I get the appeal, and you don't have to go far to find the appeal because they market the heck out of it. Diversification, there's some tax benefits, maybe, depending on what you're doing here. But these are not going to be part of my portfolio, and I'll tell you real simple why. One thing, you're signing over a lot of control to whoever's managing this. Do they have a good track record? Have they navigated downturns? If it's real estate, are the underwriting assumptions realistic? There's just a lot that you were putting in someone's hands, so you better know them. But the big thing is, this all matters because you're typically locked in, and your capital is locked there for years on end. You are in, you were part of this, heck or highwater however it goes. If you do want to do this, spend a lot of time on due diligence. The reason this is for accredited or supposedly sophisticated investors is that there aren't a lot of safety nets here. There's a lot of homework that is asked of you. Do that homework. Spend the time breaking down the manager. Look at the plan. Look closely at the fees because a lot of these are designed to get the manager rich, not you. Shop around, just do your homework.
Tyler Crowe: Matt, I'll let you do the final words here. But in a previous life for me at Motley Fool, I did some work on some scoring and rating of crowdfunded real estate funds. In my assessment, the better ones were, at best, you get a percentage point or slightly more on a net basis after fees than publicly traded rates, and you had to lock up your capital in these illiquid securities. At worst, they were launderers of fees that basically they could pitch massive yields and huge growth to the investors, but they just bought and sold a bunch of stuff within the portfolio to rack up transaction costs and management fees, and to your point, Lou, just enriching the management. That was the worst examples of it. In some ways, even just buying questionable real estate just for the sake of buying stuff, again, for the fees. I greatly appreciated the concept of bringing a lot of these funds, both on the accredited and unaccredited version. It was trying to make assets that were typically reserved for higher-net-worth individuals more accessible to all of us. I can understand the appeal, and I do sympathize with that. But the regulations on this part has just been like the Wild West, and really, you're throwing individual investors to the wolves here. The reason that this has been reserved for the rich is because they could hire an army of analysts and lawyers to look over this stuff, and, us weekend hobbyists don't really have the assets to really do that.
Matt Frankel: I'd stay away, and this comes from someone who invested in several of these private crowdfunded real estate deals over the past five or six years. The numbers are not in your favor. This was an analysis, over 50% of deals listed on the CrowdStreet platform, for example, failed to meet their targets. More than 10% went to zero. Several platforms have failed completely in the past five years, and total documented investor losses across the sector were more than $400 million across just the major platforms since 2020. Now, I'm not saying real estate crowdfunding is a scam, it's not. But the marketing really oversells the expected returns in almost all cases.
Tyler Crowe: Apologies to Matt, looking for advice on this, but I think the best advice we can give for a lot of these things is maybe it's best to stay away and stick to the publicly traded stuff. Like I said, maybe it's one or two percentage points lower for publicly traded bricks, but you get a lot of the advantages of liquidity and transparency.
As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for our guest, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements for sponsored content are provided for informational purposes only. To see our full advertising and disclosure, please check out our shows. Thanks for producer Dan Boyd, and the rest of The Motley Fool team. For Lou, Matt, and myself, thanks for listening, and we'll chat again soon.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dollar General (DG - Free Report) Headquartered in Goodlettsville, Tennessee, Dollar General Corporation is one of the largest discount retailers in the United States. The company trades in low priced merchandise typically $10 or less.
DG is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 14.62; value investors should take notice.
12 analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.04 to $7.31 per share. DG also boasts an average earnings surprise of +21%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, DG should be on investors' short list.
Key Takeaways DG Q1 FY2026 same-store sales rose 2%, driven by 1.4% traffic growth and a 0.5% higher ticket.DG saw all four categories post positive comps for a fifth straight quarter, led by non-consumables.DG said business rebounded after the February winter weather. Dollar General Corporation’s (DG - Free Report) first-quarter fiscal 2026 same-store sales growth suggests that the company has multiple drivers supporting its performance for the rest of the year. Same-store sales increased 2% in the quarter, driven by 1.4% growth in customer traffic and a 0.5% rise in the average transaction amount. Traffic-led comps generally indicate that customers are visiting more often, rather than growth being driven only by higher prices or larger baskets.
Dollar General said all four merchandising categories delivered positive comparable sales for the fifth straight quarter, with non-consumables again outpacing consumables. That balance is important because it shows the company is not relying solely on essential categories to drive comps.
Management also pointed to consistency within the quarter. All three periods were positive, with March helped by the Easter shift. The company said the business recovered after severe winter weather hurt the first two weeks of the quarter in February, with the remaining 11 weeks running near the upper end of its range. Trends also continued as May began.
For fiscal 2026, Dollar General continues to expect same-store sales growth of 2.2% to 2.7%. After a 2% first-quarter comp despite weather disruption, the latest update suggests that the company’s value and convenience proposition is still drawing repeat visits and providing a firmer base for same-store sales growth.
How Dollar General Compares With Walmart and TargetWalmart Inc. (WMT - Free Report) posted U.S. comparable sales growth of 4.1% in the first quarter of fiscal 2027, driven by higher customer transactions, increased unit volumes and strong e-commerce performance. Walmart continued to gain market share across income groups while benefiting from growth in advertising, marketplace sales and Walmart+ membership revenues. Walmart’s results reflected steady demand for both grocery and general merchandise offerings.
Meanwhile, Target Corporation (TGT - Free Report) delivered comparable sales growth of 5.6%, supported by a 4.4% increase in traffic and strength across both stores and digital channels. Target reported sales growth in all six core merchandise categories, with broad-based demand across guest demographics. Target also highlighted momentum in beauty, food and wellness categories. As Target executes its merchandising and store experience initiatives, the retailer remains focused on driving sustainable long-term growth.
What the Latest Metrics Say About Dollar GeneralDollar General has seen its shares tumble 26.8% over the past three months compared with the industry’s decline of 1.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, Dollar General's forward 12-month price-to-earnings ratio stands at 14.19, lower than the industry’s ratio of 31.30. However, it is trading below its 12-month median level of 17.52.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Dollar General’s current financial-year sales and earnings per share implies year-over-year growth of 3.9% and 6.7%, respectively. For the next fiscal year, the consensus estimate indicates a 3.9% rise in sales and 8.7% growth in earnings.
Image Source: Zacks Investment Research
Dollar General currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dollar General, with shares up 6% from a multi-month low hit in May, has the potential to make improvements. (Scott Olson/Getty Images)
Technology stocks have been all over the place. Those looking to veer away from the uncertainty can find alternatives just by looking around their neighborhoods, which might lead them to a Dollar General or CVS Health.
Given the stock's 30% pullback since late February, it would be easy to presume Dollar General's (DG +0.40%) core customers are struggling under the weight of inflation. Indeed, the Bureau of Labor Statistics says the annualized pace of consumer prices grew to 4.2% in May, largely thanks to the soaring cost of food and gasoline.
Yet, the discount retailer is doing surprisingly well, reporting respectable same-store sales growth of 2% for the three months ending in early May and companywide revenue growth of 3.4% year over year. Earnings grew even more thanks to curbed inventory costs, and the company's calling for even faster top- and bottom-line growth than for the full fiscal year.
What gives?
Image source: Getty Images.
Not yesteryear's Dollar General Part of the answer lies in the fact that the company's full-year guidance actually suggests slowing sales growth ahead. Perhaps worse, investors may fear inflation hasn't yet actually affected Dollar General's results but could do so soon.
And these aren't unreasonable concerns. While middle-income consumers are increasingly shopping with Walmart to make their money go farther, there's been no real trade-down option for Dollar General's core demographic.
This is not the Dollar General of 2021 and 2022, though, when steep, unexpected inflation first surfaced that Dollar General wasn't ready for. It's ready now.
Take where most of the retailer's first-quarter sales growth came from as evidence. As it turns out, households earning at least $100,000 per year are becoming more regular patrons, accounting for the biggest piece of last quarter's 1.4% increase in total foot traffic. Gross profits also improved more than 60 basis points in Q1, suggesting the company is enjoying a combination of greater pricing power and lower merchandise costs. During the conference call for first-quarter earnings, Dollar General CEO Todd Vasos even touted the draw of a selection of over 2,000 items priced at $1 or less.
This is largely what was missing as Dollar General emerged from the COVID-19 pandemic in 2022.
Today's Change
(
0.40
%) $
0.46
Current Price
$
114.80
To buy or not to buy? It's not necessarily a slam dunk you absolutely must immediately buy. Even if the retailer has quietly reinvented itself, clearly the market doesn't see it or believe it yet. More investors need to get on board if the stock's going to start recovering anytime soon.
For what it's worth, though, the analyst community seems optimistic, suggesting this stock's worth $130.61 per share versus the ticker's current price of less than $109.
It's also worth acknowledging that Dollar General's seemingly tepid guidance may represent the worst-case scenario, setting the stage for earnings and revenue beats in the year ahead. The company's been racking those up since its regrouping effort was finalized early last year.
Bottom line? It's still not a great core holding, simply because its net growth potential remains modest no matter how well it performs -- never mind the lack of certainty that last quarter's results are an indication of how the rest of the year will turn out. If you've got room in your portfolio for a value name that's underpriced because it's currently underestimated, though, there's a case to be made for stepping into this one.
GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--Dollar General (NYSE: DG) today announced a $250,000 donation to the American Red Cross Disaster Responder Program to celebrate America’s 250th anniversary. This contribution, which also marks the 25th anniversary of the partnership between Dollar General and the American Red Cross, will help further extend and strengthen Red Cross disaster preparedness, response and recovery efforts nationwide.
“As we commemorate our 25th partnership anniversary with the American Red Cross together during America’s 250th celebrations, we are proud to continue supporting the organization’s lifesaving work to prepare, recover and restore hope when the unthinkable occurs in our hometowns,” said Denine Torr, Dollar General’s vice president of corporate social responsibility and philanthropy. “In the aftermath of hurricanes, tornadoes, floods, home fires, earthquakes and other disasters, we hope this donation strengthens Red Cross response efforts for families, helping them move forward with stability and hope.”
Since 2001, Dollar General has contributed more than $11 million to the Red Cross through corporate donations and in‑store collections, helping to ensure individuals and families have access to safe shelter, warm meals, emotional support and essential resources when emergencies occur.
“As we see increasingly frequent extreme weather events, more families are turning to the Red Cross for help during their most difficult moments,” said Anne McKeough, chief development officer at the American Red Cross. “We greatly appreciate Disaster Responder members like Dollar General whose proactive and compassionate support strengthens our readiness and response efforts — so we can deliver help, care and hope without delay when people need it most.”
In keeping with its mission of Serving Others, Dollar General remains dedicated to supporting its employees, customers and communities before, during and after disasters. In addition to its long‑standing partnership with the Red Cross, the Company partners with organizations such as World Central Kitchen, Feeding America and the Kids In Need Foundation to provide relief. The Company also supports recovery efforts through the DG Employee Assistance Foundation, which provides financial assistance to employees experiencing hardship, and the Dollar General Literacy Foundation’s Beyond Words program, which awards grants to public school libraries to help rebuild and restore collections after disasters.
About Dollar General Corporation
Dollar General Corporation (NYSE: DG) is proud to serve as America’s neighborhood general store. Founded in 1939, Dollar General lives its mission of Serving Others every day by providing access to affordable products and services for its customers, career opportunities for its employees, and literacy and education support for its hometown communities. As of May 1, 2026, the Company’s 21,055 Dollar General, DG Market, DGX and pOpshelf stores across the United States and Mi Súper Dollar General stores in Mexico provide everyday essentials including food, health and wellness products, cleaning and laundry supplies, self-care and beauty items, and seasonal décor from our high-quality private brands alongside many of the world’s most trusted brands such as Coca Cola, PepsiCo/Frito-Lay, General Mills, Hershey, J.M. Smucker, Kraft, Mars, Nestlé, Procter & Gamble and Unilever.
In the latest close session, StoneCo Ltd. (STNE - Free Report) was down 1.15% at $14.61. The stock trailed the S&P 500, which registered a daily gain of 1.18%. At the same time, the Dow added 0.66%, and the tech-heavy Nasdaq gained 1.96%.
Prior to today's trading, shares of the company had gained 5.5% outpaced the Computer and Technology sector's gain of 5.37% and the S&P 500's gain of 3.93%.
Investors will be eagerly watching for the performance of StoneCo Ltd. in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on May 14, 2026. In that report, analysts expect StoneCo Ltd. to post earnings of $0.44 per share. This would mark year-over-year growth of 29.41%. Alongside, our most recent consensus estimate is anticipating revenue of $690.25 million, indicating a 10.29% upward movement from the same quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.92 per share and a revenue of $2.72 billion, representing changes of +18.52% and +3.06%, respectively, from the prior year.
Any recent changes to analyst estimates for StoneCo Ltd. should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 8.13% downward. At present, StoneCo Ltd. boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, StoneCo Ltd. is holding a Forward P/E ratio of 7.7. This represents a discount compared to its industry average Forward P/E of 18.17.
It is also worth noting that STNE currently has a PEG ratio of 0.33. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software was holding an average PEG ratio of 1.01 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 95, this industry ranks in the top 39% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
StoneCo Ltd. (STNE - Free Report) closed the most recent trading day at $15.40, moving +1.99% from the previous trading session. The stock exceeded the S&P 500, which registered a loss of 0.24% for the day. Meanwhile, the Dow experienced a drop of 0.01%, and the technology-dominated Nasdaq saw a decrease of 0.26%.
Shares of the company have appreciated by 13.11% over the course of the past month, outperforming the Computer and Technology sector's gain of 9.41%, and the S&P 500's gain of 6.42%.
The upcoming earnings release of StoneCo Ltd. will be of great interest to investors. The company's earnings report is expected on May 14, 2026. The company's earnings per share (EPS) are projected to be $0.42, reflecting a 23.53% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $708.45 million, indicating a 13.2% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.99 per share and revenue of $2.82 billion, which would represent changes of +22.84% and +6.67%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for StoneCo Ltd. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been a 4.78% fall in the Zacks Consensus EPS estimate. StoneCo Ltd. is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that StoneCo Ltd. has a Forward P/E ratio of 7.59 right now. This valuation marks a discount compared to its industry average Forward P/E of 19.18.
Meanwhile, STNE's PEG ratio is currently 0.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 1.1 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 39% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
George Town, Grand Cayman--(Newsfile Corp. - April 23, 2026) - StoneCo Ltd. (NASDAQ: STNE) ("Stone" or "the Company") hereby informs its shareholders and the market that has filed today, April 23, its Annual Report on Form 20-F for the fiscal year ended December 31, 2025, with the U.S. Securities and Exchange Commission (the "SEC").
The report is available on the SEC's website, at www.sec.gov, and on StoneCo's Investor Relations website, at https://investors.stone.co.
About StoneCo
Stone Co. is a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels and help them grow their businesses with our payments, banking, and credit solutions.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. These statements identify prospective information and may include words such as "believe," "may," "will," "aim," "estimate," "continue," "anticipate," "intend," "expect," "forecast," "plan," "predict," "project," "potential," "aspiration," "objectives," "should," "purpose," "belief," and similar, or variations of, or the negative of such words and expressions, although not all forward-looking statements contain these identifying words.
Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Stone's control.
Stone's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: more intense competition than expected, lower addition of new clients, regulatory measures, more investments in our business than expected, and our inability to execute successfully upon our strategic initiatives, among other factors.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/294068
Source: StoneCo Ltd.
Ready to Announce with Confidence? Send us a message and a member of our TMX Newsfile team will contact you to discuss your needs.
In the latest trading session, StoneCo Ltd. (STNE - Free Report) closed at $11.99, marking a -1.88% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.12%. Meanwhile, the Dow experienced a drop of 0.13%, and the technology-dominated Nasdaq saw an increase of 0.2%.
Shares of the company have depreciated by 9.21% over the course of the past month, underperforming the Computer and Technology sector's gain of 16.05%, and the S&P 500's gain of 9.3%.
Analysts and investors alike will be keeping a close eye on the performance of StoneCo Ltd. in its upcoming earnings disclosure. The company's earnings report is set to go public on May 14, 2026. The company is forecasted to report an EPS of $0.42, showcasing a 23.53% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $708.45 million, indicating a 13.2% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.99 per share and revenue of $2.82 billion. These totals would mark changes of +22.84% and +6.67%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for StoneCo Ltd. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.86% lower. At present, StoneCo Ltd. boasts a Zacks Rank of #3 (Hold).
In terms of valuation, StoneCo Ltd. is presently being traded at a Forward P/E ratio of 6.14. This signifies a discount in comparison to the average Forward P/E of 18.77 for its industry.
Meanwhile, STNE's PEG ratio is currently 0.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 1.09 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 86, placing it within the top 36% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
On April 29, 2026, StoneCo Ltd STNE shares experienced a significant decline, falling 7.0% to a current price of $10.85. This decline is part of a broader trend, with the stock down 11.2% year-to-date and 6.7% over the past year. The stock has traded within a 52-week range of $10.83 to $19.95.
GF Value™ verdict: Current price of $10.85 is 44.0% below the GF Value™ estimate of $19.36.GF Score™ of 73/100 indicates the stock is rated as Above Average.Most notable signal: Insider activity shows that insiders sold $0.1M in the last 3 months with no buying activity. Is STNE Overvalued or Undervalued? The current price of StoneCo Ltd at $10.85 is significantly below the GF Value™ estimate of $19.36, suggesting that the stock is undervalued by approximately 44.0%. This margin of safety implies a potential upside for investors who believe that the market has mispriced the stock. However, it is essential to note that the GF Valuation label indicates a "Possible Value Trap," which suggests caution. A value trap occurs when a stock is deemed cheap based on traditional metrics but may not deliver returns due to underlying issues.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. While the undervaluation presents an opportunity, potential investors should consider the company's financial strength and profitability rankings, which also impact the risk profile.
How Does STNE's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 6.3x 16.0x (5-Year Median) Forward P/E 5.1x N/A StoneCo's current P/E (TTM) of 6.3x is significantly below its 5-year median P/E of 16.0x, indicating that the stock is trading at a substantial discount relative to its historical valuation. This analysis agrees with the GF Value™ verdict, reinforcing the notion that the stock may be undervalued. However, the stark difference between the current and historical P/E suggests that investors should remain cautious, as the low valuation could be a reflection of deeper issues within the company.
What Does STNE's GF Score™ Tell Us? Metric Rating GF Score™ 73/100 Financial Strength 4/10 Profitability 8/10 Growth 4/10 Valuation 4/10 Momentum 5/10 The GF Score™ of 73/100 indicates that StoneCo Ltd is rated as Above Average, reflecting a mix of strengths and weaknesses. Notably, the company scores well in profitability with an 8/10, suggesting strong profit margins compared to peers. However, its financial strength and growth ranks are much weaker at 4/10, indicating potential vulnerabilities that investors should consider. The lower valuation score further emphasizes the need for caution despite the attractive profitability metrics.
What Are Insiders Doing with STNE Stock? Insider activity in StoneCo Ltd has shown some concern, as insiders sold $0.1 million worth of shares in the past three months without any purchasing activity. This pattern raises potential red flags regarding the confidence insiders have in the company's future prospects. Insider selling can often indicate that those closest to the company may not be optimistic about its short-term performance, warranting closer scrutiny from potential investors.
What This Means for Investors Based on the analysis of GF Value™, StoneCo Ltd STNE appears to be undervalued at its current price of $10.85. However, potential investors should approach with caution due to the warning of a possible value trap and the mixed signals from insider activity. An understanding of the company's financial health, profitability, and growth metrics is essential before making any investment decision.
For the complete analysis, visit the StoneCo Ltd STNE stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is STNE's GF Score™?
STNE has a GF Score™ of 73/100, indicating that it is rated as Above Average, which suggests a potential for higher long-term returns compared to lower-rated stocks.
Is STNE overvalued or undervalued?
STNE is currently undervalued, with a GF Value™ estimate of $19.36 compared to its current price of $10.85, representing a 44.0% discount.
What is STNE's P/E ratio?
STNE's P/E (TTM) is 6.3x, significantly below its 5-year median P/E of 16.0x, suggesting that the stock is trading at a considerable discount to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
StoneCo Ltd. (STNE - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this company have returned -24.4%, compared to the Zacks S&P 500 composite's +12.2% change. During this period, the Zacks Internet - Software industry, which StoneCo falls in, has gained 16.5%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, StoneCo is expected to post earnings of $0.42 per share, indicating a change of +23.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.3% over the last 30 days.
The consensus earnings estimate of $1.99 for the current fiscal year indicates a year-over-year change of +22.8%. This estimate has changed +3.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $2.32 indicates a change of +16.4% from what StoneCo is expected to report a year ago. Over the past month, the estimate has changed +8.9%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for StoneCo.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of StoneCo, the consensus sales estimate of $708.45 million for the current quarter points to a year-over-year change of +13.2%. The $2.82 billion and $2.86 billion estimates for the current and next fiscal years indicate changes of +6.7% and +1.5%, respectively.
Last Reported Results and Surprise HistoryStoneCo reported revenues of $689.78 million in the last reported quarter, representing a year-over-year change of +11.7%. EPS of $0.5 for the same period compares with $0.39 a year ago.
Compared to the Zacks Consensus Estimate of $717.92 million, the reported revenues represent a surprise of -3.92%. The EPS surprise was +4.17%.
Over the last four quarters, StoneCo surpassed consensus EPS estimates three times. The company topped consensus revenue estimates just once over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
StoneCo is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about StoneCo. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Wall Street expects a year-over-year increase in earnings on higher revenues when StoneCo Ltd. (STNE - Free Report) reports results for the quarter ended March 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on May 14, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.42 per share in its upcoming report, which represents a year-over-year change of +23.5%.
Revenues are expected to be $708.45 million, up 13.2% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 3.33% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for StoneCo?For StoneCo, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +3.94%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that StoneCo will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that StoneCo would post earnings of $0.48 per share when it actually produced earnings of $0.50, delivering a surprise of +4.17%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
StoneCo appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerAnother stock from the Zacks Internet - Software industry, AudioEye (AEYE - Free Report) , is soon expected to post earnings of $0.17 per share for the quarter ended March 2026. This estimate indicates a year-over-year change of +13.3%. Revenues for the quarter are expected to be $10.54 million, up 8.3% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for AudioEye has remained unchanged. Nevertheless, the company now has an Earnings ESP of +9.62%, reflecting a higher Most Accurate Estimate.
This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that AudioEye will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
George Town, Grand Cayman--(Newsfile Corp. - May 14, 2026) - StoneCo Ltd. (NASDAQ: STNE) ("Stone" or the "Company") today reported its financial results for the first quarter ended March 31, 2026, in a Earnings Release wich is now posted to the company's Investor Relations website https://investors.stone.co/.
Conference Call
Stone will discuss its 1Q26 results during a teleconference today, May 14, 2026, at 5:00 PM ET/6:00 PM BRT.
The conference call can be accessed live over the Zoom webinar (ID: 811 4841 9160 | Password: 164760).
You can also access the meeting over the phone by dialing +1 646 931 3860 or +1 669 444 9171 from the U.S. Callers from Brazil can dial +55 21 3958 7888. Callers from the UK can dial +44 330 088 5830. The call will also be webcast live and a replay will be available a few hours after the call concludes. The live webcast and replay will be available on Stone's investor relations website at https://investors.stone.co/.
About Stone Co.
Stone Co. is a leading provider of financial technology solutions that empower merchants to conduct commerce seamlessly across multiple channels and help them grow their businesses with payments, banking and credit.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/297506
StoneCo Ltd. (STNE - Free Report) came out with quarterly earnings of $0.42 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -0.78%. A quarter ago, it was expected that this company would post earnings of $0.48 per share when it actually produced earnings of $0.5, delivering a surprise of +4.17%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
StoneCo, which belongs to the Zacks Internet - Software industry, posted revenues of $679.39 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 4.1%. This compares to year-ago revenues of $625.86 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
StoneCo shares have lost about 34.5% since the beginning of the year versus the S&P 500's gain of 8.8%.
What's Next for StoneCo?While StoneCo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for StoneCo was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $709.58 million in revenues for the coming quarter and $1.99 on $2.82 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
ServiceTitan Inc. (TTAN - Free Report) , another stock in the same industry, has yet to report results for the quarter ended April 2026. The results are expected to be released on June 4.
This company is expected to post quarterly earnings of $0.27 per share in its upcoming report, which represents a year-over-year change of +50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
ServiceTitan Inc.'s revenues are expected to be $256.3 million, up 18.8% from the year-ago quarter.
2 Digital Payment Platforms That Are Crushing PayPal and SquareStoneCo NASDAQ: STNE reported first-quarter 2026 results that management described as broadly in line with expectations for a softer first half, as the Brazilian financial technology company worked through elevated merchant churn, weaker small-business conditions and higher credit provisions.
Chief Executive Officer Mateus Scherer said three factors shaped the quarter: a macro environment weighing on smaller merchants, typical first-quarter seasonality and a credit portfolio that continued to grow profitably despite nonperforming loans coming in above the company’s expectations. Scherer said StoneCo is focused on improving retention, re-accelerating total payment volume, or TPV, and maintaining disciplined capital allocation.
Get StoneCo alerts:
StoneCo Stock May be Basing Like a Rock “The quarter was broadly consistent with the softer first half dynamics we had anticipated,” Scherer said. He added that the period marked “the beginning of a transition phase” between capital distributions tied to the Linx divestiture and the operational momentum management expects to build in the second half of the year.
Revenue rises, EPS benefits from buybacks Chief Financial Officer Diego Salgado said total revenue and income reached BRL 3.6 billion in the quarter, up 6% from a year earlier. He attributed the increase primarily to continued expansion in credit revenues and healthy profitability in payments, partly offset by lower floating revenues from deposits.
StoneCo Ltd. Stock is in Turnaround Adjusted gross profit was BRL 1.5 billion, broadly stable year over year, as revenue growth was offset mainly by higher credit-loss provisions and increased operating costs. Gross profit margin fell to 41.6% from 44.4% in the first quarter of 2025.
Adjusted net income rose 3% year over year to BRL 549 million, while adjusted basic earnings per share increased 15% to BRL 2.19. Salgado said EPS outperformed net income because of StoneCo’s ongoing share repurchase program.
The company said it has distributed BRL 3.6 billion to shareholders year to date, representing a 27% distribution yield. That total includes an extraordinary dividend paid May 4 using proceeds from the Linx divestiture and about BRL 600 million in ordinary share buybacks. Scherer said StoneCo still expects to repurchase at least another BRL 1.4 billion in shares this year.
TPV growth remains soft as churn weighs on payments StoneCo reported TPV of BRL 137 billion in the quarter, up 3% year over year. Salgado said growth reflected pressure from the microeconomic environment for smaller merchants, relatively stronger digital sales in areas where StoneCo has less exposure, and elevated churn identified in the prior quarter.
Scherer said the churn pressure is not broad-based. The company’s legacy customer base continues to perform in line with historical churn levels, he said, while the pressure has been more concentrated among clients onboarded during 2025. During that period, StoneCo expanded its product offering to include areas such as instant settlement, investments and credit cards, but Scherer said bundles and pricing became too complex.
“That created friction for some clients, and we are addressing it directly,” Scherer said. He said StoneCo is reviewing its offerings, simplifying bundles and moving toward a cleaner and more transparent pricing structure.
Management said early volume indicators have improved, with TPV growth showing improvement in April, though Scherer cautioned it is too early to call a definitive trend. In response to analyst questions, he said the company is adjusting sales-force incentives to better align origination with client retention and long-term value creation.
New client metrics introduced StoneCo also changed how it reports active clients, consolidating prior payment and banking disclosures into a single metric: merchants that generated revenue over the past 30 days across payments, banking or credit solutions.
Under that definition, total active clients were 4.7 million in the first quarter, up 13% year over year but down 5% sequentially. Salgado said the sequential decline largely reflected conscious actions to focus on more engaged and revenue-generating clients.
The company also introduced average revenue per active client, or ARPAC, which was BRL 247 per month in the quarter, down 3% sequentially and 11% from a year earlier. Scherer said the year-over-year decline was driven mainly by client mix, including the addition of clients using lower-ARPAC products such as banking-only solutions. He said clients using multiple products, including payments, banking and credit, have ARPAC “significantly higher” than the company average.
Credit portfolio grows, but provisions increase StoneCo’s total credit portfolio reached BRL 3.2 billion, up 14% sequentially. Merchant solutions, mostly working-capital offerings, totaled BRL 2.9 billion, while the credit card portfolio reached BRL 400 million. Credit revenues rose 25% sequentially to BRL 297 million, and portfolio yield increased to 3.3% from 3.1% in the fourth quarter and 2.6% a year earlier.
Credit quality weakened during the quarter. Salgado said models for micro, small and medium-sized merchants on StoneCo’s automated desk lost efficiency, with newer cohorts performing worse than historical averages. Nonperforming loans 15 to 90 days past due increased by nearly 60 basis points, while loans more than 90 days past due rose to 7% from 5.2% in the prior quarter.
StoneCo provisioned BRL 166 million for credit losses in the quarter, bringing cost of risk to 21.9%. The company maintained a coverage ratio of 229%.
Scherer said the increase in delinquencies reflected a tougher credit environment across Brazil, model underperformance beginning late in the fourth quarter and isolated cases in the dedicated desk. Management said StoneCo responded by increasing pricing, tightening risk selection, deploying new models and reducing maximum ticket sizes in the dedicated desk. The company has also started disbursing secured working-capital products.
Salgado said StoneCo expects cost of risk to decline gradually toward the mid- to high-teens over time, though some early delinquencies from the first quarter will continue to flow through the income statement in coming months.
Deposits and guidance remain in focus Retail deposits ended the quarter at BRL 10.1 billion, up 22% year over year but down 9% sequentially, which Salgado attributed to first-quarter seasonality. Average daily retail deposits grew 7% sequentially and 26% year over year.
Salgado said deposits are becoming a more important funding source. He said StoneCo has reduced its total cost of funding from 100% of CDI in early 2025 to about 87% more recently, helped by client deposits. He also described deposit growth as an important natural hedge against interest-rate fluctuations.
Management said full-year 2026 guidance remains unchanged, with performance expected to be weighted toward the second half as credit revenues compound and commercial initiatives improve retention. However, Salgado said higher interest rates are now one of the most challenging factors in the forecast, noting that StoneCo had previously assumed year-end rates of 12.5%, while the current expectation is closer to 14%.
“I think today we’re probably closer to the bottom of the guidance that we provided, but there is still a long way to go,” Salgado said.
About StoneCo NASDAQ: STNEStoneCo Ltd., commonly known as Stone, is a Brazilian financial technology company that provides integrated digital payment solutions and related financial services to merchants. Through its cloud-based platform, Stone enables businesses of all sizes to accept a variety of payment methods, including point-of-sale (POS) terminals, mobile card readers and e-commerce gateways. In addition to payment acceptance, the company offers value-added services such as working capital loans, digital banking products and automated billing tools designed to help merchants manage cash flow and streamline operations.
Since its founding in 2012 by André Street and Eduardo Pontes, Stone has focused on serving over half a million merchants across Brazil's retail, restaurant and services sectors.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Should You Invest $1,000 in StoneCo Right Now?Before you consider StoneCo, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and StoneCo wasn't on the list.
While StoneCo currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
StoneCo is reaffirmed as a Strong Buy, with robust fundamentals and a compelling valuation despite recent macro headwinds. STNE's capital ratio reduction to 17% unlocks capital for growth and buybacks, supporting a projected 30% shareholder yield in 2026. Macroeconomic risks, especially from the Iran conflict and elevated Selic rates, may pressure near-term earnings but do not undermine long-term growth prospects.
StoneCo Ltd. (STNE - Free Report) closed the last trading session at $11.35, gaining 4.6% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $15.6 indicates a 37.4% upside potential.
The mean estimate comprises nine short-term price targets with a standard deviation of $4.83. While the lowest estimate of $9.00 indicates a 20.7% decline from the current price level, the most optimistic analyst expects the stock to surge 102.6% to reach $23.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
But, for STNE, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why STNE Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 16.1%, as one estimate has moved higher compared to no negative revision.
Moreover, STNE currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much STNE could gain, the direction of price movement it implies does appear to be a good guide.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is StoneCo (STNE - Free Report) . STNE is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.19, while its industry has an average P/E of 27.17. Over the past 52 weeks, STNE's Forward P/E has been as high as 11.19 and as low as 6.09, with a median of 8.65.
We also note that STNE holds a PEG ratio of 0.37. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. STNE's PEG compares to its industry's average PEG of 0.98. Within the past year, STNE's PEG has been as high as 0.45 and as low as 0.28, with a median of 0.35.
Another notable valuation metric for STNE is its P/B ratio of 2.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.46. Over the past year, STNE's P/B has been as high as 2.71 and as low as 0.88, with a median of 1.45.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. STNE has a P/S ratio of 1.05. This compares to its industry's average P/S of 2.8.
These figures are just a handful of the metrics value investors tend to look at, but they help show that StoneCo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STNE feels like a great value stock at the moment.
StoneCo Ltd. (STNE - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, STNE crossed above the 20-day moving average, suggesting a short-term bullish trend.
The 20-day simple moving average is a popular investing tool. Traders like this SMA because it offers a look back at a stock's price over a shorter period and helps smooth out price fluctuations. The 20-day can also show more trend reversal signals than longer-term moving averages.
Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
STNE has rallied 16% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests STNE could be on the verge of another move higher.
Looking at STNE's earnings estimate revisions, investors will be even more convinced of the bullish uptrend. There have been 2 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on STNE for more gains in the near future.
CORTE MADERA, Calif.--(BUSINESS WIRE)--RH (NYSE: RH) today announced that it will report financial results for the first quarter fiscal 2026 ended May 2, 2026, on Thursday, June 11, 2026, after market close. RH’s first quarter fiscal 2026 financial results will include a shareholder letter from Gary Friedman, RH Chairman and Chief Executive Officer, highlighting the Company’s continued evolution and recent performance. The shareholder letter and financial results will be posted to the Company’s investor relations website at ir.rh.com.
RH leadership will host a live conference call and audio webcast at 2:00 pm Pacific Time (5:00 pm Eastern Time) on June 11, 2026. The live conference call may be accessed by dialing 800.715.9871 or 646.307.1963 for international callers (conference ID: 7345752). The call and replay can also be accessed via audio webcast at ir.rh.com.
ABOUT RH
RH (NYSE: RH) is a global curator of design, taste and style in the luxury lifestyle market. Operating across the United States, Canada, the United Kingdom and Europe, the Company offers collections through its retail galleries, sourcebooks and online at RH.com, RHModern.RH.com, RHBabyandChild.RH.com, RHTEEN.RH.com and Waterworks.RH.com, with integrated hospitality experiences in galleries throughout the United States and internationally.
The stock has key technical support as record short interest creates fuel for further upside
Jun 5, 2026 at 2:14 PM
We recommended an RH call option last week
Subscribers to Schaeffer's Weekend Trader options recommendation service received this RH commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Furniture retailer RH (NYSE:RH) last week broke out and above the upper boundary of a three-month basing pattern that followed a multi-year low in April. This low was a fake-out move below the April 2025 lows, and just two weeks ago the equity crossed above the 50-day moving average. This crossover tends to have historically bullish returns, per our quantitative data. Previously, a cross below this trendline was a sell signal.
RH had also cleared the pre-earnings close in late-March that preceded a gap lower, which marked a low in the shares. Short interest is at a record high as well. The security has surged more than 30% since its April post-earnings low, and with the shares clearing the pre-earnings close last week, it could ignite short covering in the weeks ahead.
Our recommended call option has a leverage ratio of 4.0 and will double on a 29.8% rise in the underlying equity.
The SEC Moves to End the $25,000 Day Trading Barrier
For years, this rule kept most traders on the sidelines. Now, the door is opening to a whole new wave of active traders.
Dynamite Day Trading Signals helps you hit the ground running with up 2 options trade alerts per week, built to capture fast-moving opportunities.
Key Takeaways RH will report fiscal Q1 2026 results on June 11 after market close; estimates call for a $2.07 loss.RH revenues are expected at $791.6M, down 2.7% YoY, amid weak housing, high mortgage rates and uncertainty.RH sees EBITDA margin 5.5%-6.5%; Milan/London startup costs may cut margin 420 bps plus tariffs. RH (RH - Free Report) is scheduled to report its first-quarter fiscal 2026 (ended May 2, 2026) results on June 11, after the closing bell.
In the last reported quarter, the company’s adjusted earnings per share of $1.53 missed the Zacks Consensus Estimate of $2.21 by 30.8%. The reported figure decreased slightly by 3.2% from $1.58 in the year-ago period. Net revenues of $842.6 million also lagged the consensus mark of $872 million but improved 3.7% year over year.
RH’s earnings surpassed estimates in only one of the trailing four quarters and missed on the other three occasions, but the average surprise was positive 46.5%.
How Are Estimates Placed for RH Stock?The Zacks Consensus Estimate for the fiscal first quarter indicates a loss of $2.07 per share, which has remained unchanged over the past 30 days. In the year-ago period, the company reported earnings of 13 cents per share.
The consensus estimate for revenues is pegged at $791.6 million, indicating a 2.7% year-over-year decline.
Factors Likely to Have Shaped RH’s Q1 PerformanceAssessing the Sales Environment: RH’s fiscal first-quarter revenue performance is likely to have been pressured by continued weakness in the U.S. housing market, which management has described as one of the most difficult environments in decades for home-related spending. Elevated mortgage rates and macroeconomic uncertainty may have weighed on furniture demand, particularly for larger discretionary purchases. Management guided for first-quarter fiscal 2026 revenue growth of negative 2% to negative 4%, reflecting expectations for a soft demand environment.
Despite these headwinds, several company-specific initiatives may have provided support. RH entered fiscal 2026 with momentum from market-share gains and revenue growth that outpaced many industry peers. The company continued to benefit from its luxury positioning, expansive gallery network and integrated hospitality model, which help drive customer engagement and brand awareness. Management also remained optimistic about growth opportunities tied to new gallery concepts and international expansion efforts.
However, the quarter is likely to have seen limited contribution from RH Estates, the company’s new traditional luxury furnishings concept. Management indicated that major launch activities would occur during the second quarter, with meaningful revenue benefits expected later in the year.
Factors Affecting Profitability: Profitability is expected to have remained under pressure during the quarter. RH forecasted a fiscal first-quarter adjusted EBITDA margin of 5.5% to 6.5%, substantially below its longer-term targets. A major factor is the elevated level of pre-opening and startup expenses tied to international expansion initiatives, including RH Milan and RH London. Management estimated that these costs alone would reduce first-quarter adjusted EBITDA margin by roughly 420 basis points.
Tariff-related costs and supply-chain adjustments are likely to have been another challenge. During the fourth-quarter earnings discussion, management noted that tariff-related sourcing transitions had already created operational disruptions and margin pressure. Continued investments in global expansion, product development and the upcoming RH Estates launch were also expected to weigh on earnings in the near term.
Overall, RH’s fiscal first-quarter results are expected to reflect a balance between near-term macroeconomic pressures and substantial investments intended to strengthen the company’s long-term growth platform.
What the Zacks Model Says for RHOur proven model does not conclusively predict an earnings beat for RH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer ReleasesWilliams-Sonoma’s (WSM - Free Report) first-quarter fiscal 2026 earnings topped the Zacks Consensus Estimate by 7.2%, while net revenues met the same at $1.81 billion. Year over year, both metrics grew 4.3% and 4.4%, respectively, owing to the broad-based comparable growth across brands and channels and steady earnings delivery.
For fiscal 2026, WSM expects annual net revenues to increase in the range of 2.7-6.7%, with comparable brand revenue growth (comps) in the range of 2-6%. WSM also continues to project an operating margin between 17.5% and 18.1% for the year.
Lowe’s (LOW - Free Report) reported first-quarter fiscal 2026 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate. Adjusted earnings were $3.03 per share, rising 3.8% year over year and beating the Zacks Consensus Estimate of $2.96 by 2.4%. Net sales came in at $23.1 billion, rallying 10.3% from the year-ago quarter and surpassing the consensus mark of $22.9 billion by 0.6%.
Lowe’s reaffirmed its fiscal 2026 guidance and expects total sales between $92 billion and $94 billion, indicating year-over-year growth of 7-9%. Comparable sales are anticipated to be flat to up 2%. The company expects the adjusted operating margin to be 11.6-11.8%. Lowe’s expects EPS of $11.75-$12.25 and adjusted EPS of $12.25-$12.75.
The Home Depot Inc.’s (HD - Free Report) first-quarter fiscal 2026 top and bottom lines outpaced the Zacks Consensus Estimate. Adjusted earnings were $3.43 per share, down 3.7% from the year-ago quarter but beat the consensus mark of $3.40. Net sales rose 4.8% year over year to $41.77 billion and topped the consensus estimate of $41.49 billion.
Home Depot reaffirmed its fiscal 2026 framework, calling for total sales growth of approximately 2.5-4.5% and comparable sales growth of roughly flat to 2%. The company also expects to open about 15 stores this year. HD anticipates EPS growth of approximately flat to 4% from $14.23 in fiscal 2025.
RH (NYSE:RH) will release earnings for its first quarter after the closing bell on Thursday, June 11.
Analysts expect the Corte Madera, California-based company to report a quarterly loss of $2.07 per share, versus a profit of 13 cents per share in the year-ago period. The consensus estimate for RH's quarterly revenue is $792.38 million (it reported $813.95 million last year), according to Benzinga Pro.
On March 31, RH reported worse-than-expected fourth-quarter financial results and issued FY26 sales guidance below estimates.
RH shares fell 0.9% to close at $148.69 on Wednesday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let's have a look at how Benzinga's most-accurate analysts have rated the company in the recent period.
Considering buying RH stock? Here’s what analysts think:
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Chicago, June 11, 2026 (GLOBE NEWSWIRE) -- RH CPAs is proud to announce it has received the Audit & Accountancy Services award at the Captive Review Awards USA 2026, presented on June 10 by Captive Review. This is the fifth consecutive year the firm has earned this recognition.
The award was presented at the Captive Review Awards USA 2026 ceremony in Chicago, which celebrates excellence and innovation in the U.S. captive insurance sector.
The independent judging panel cited the firm’s distinguished performance, noting: "RH CPAs stands out for its responsive, efficient service, specialized knowledge in captive insurance, and ability to deliver personalized solutions for complex audit and tax requirements. The firm's strong industry reputation, innovative service approach, and sustained domestic and international growth further reinforce its position as a highly respected and well-recommended specialist provider."
"Being recognized for five years is an honor that reflects our team's ongoing dedication to our clients," said Leon Rives II, Chief Visionary Officer at RH CPAs. "We appreciate the trust our clients entrust to us and remain committed to setting the standard for audit and accountancy services in the captive industry."
Captive Review has been a trusted voice for the risk management and captive insurance communities since 1999. The Captive Review Awards event was held in conjunction with the 2026 Captive Review Conference USA, which brought together senior captive owners, risk managers, regulators, brokers, reinsurers and advisers to explore how captives are evolving in structure, governance and purpose. For more information about the Captive Review Awards USA 2026 winners, please visit: captivereview2026/en/page/2026-winners
About RH CPAs
RH CPAs is a growth-focused professional services firm dedicated to providing more than compliance. It partners with clients to help build their future. Led by Chief Visionary Officer Leon Rives II, RH CPAs serves a diverse client base spanning nonprofits, school districts, and multi-billion dollar life insurance companies, with offices in North Carolina and operations in Karachi, Pakistan. The firm thrives on being different, not for its own sake, but because its clients deserve partners who think beyond the expected. Learn more at www.rh-accounting.com.
That wraps up our initial coverage of RH’s Q1 results. Thank you for stopping by!
Check out management’s earnings call at 5 PM EST for more updates.
Yesterday
RH raised its fiscal 2026 outlook after reporting first-quarter results that exceeded management’s expectations. The luxury furniture retailer now expects fiscal 2026 revenue growth of 4.5-8.0%, adjusted EBITDA margins of 14.2-16.0%, and adjusted free cash flow of $300-$400 million.
Management identified RH Estates, alongside backlog conversion and new gallery openings, as key factors supporting its expectation for revenue growth to accelerate in the second half of fiscal 2026.
Management said tariff-related sourcing disruptions delayed approximately $45 million of revenue in the quarter, but expects much of that business to be recognized later this year.
Yesterday
RH just reported earnings, with shares initially up about 9% following the report. Here are the key numbers:
Revenue: $800.3 million Adjusted EBITDA: $56.9 million (7.1% margin) Free Cash Flow: $13.3 million Guidance:
FY2026 Revenue Growth: 4.5% to 8.0% FY2026 Adjusted EBITDA Margin: 14.2% to 16.0% FY2026 Adjusted Free Cash Flow: $300 million to $400 million Q2 2026 Revenue Growth: 0.5% to 2.5% Q2 2026 Adjusted EBITDA Margin: 11.5% to 13.0% Quick read:
RH exceeded the high end of management’s expectations in Q1 despite tariff-related sourcing issues that delayed roughly $45 million of revenue.
Management raised its full-year outlook and expects backlog normalization to drive a meaningful revenue acceleration in the second half of 2026.
Investors appear encouraged that RH’s recovery thesis remains intact, with management pointing to backlog reduction, new store openings, and the launch of RH Estates as key growth drivers for the back half of the year.
Yesterday
With RH’s (NYSE:RH | RH Price Prediction) first-quarter results at 4:05 PM ET approaching, here are some key topics analysts will be watching for:
Key Topics Management Must Address Whether the 420 bps international drag is tracking to plan after Paris “exceeded RH New York” traffic. RH Estates rollout across the top 30-40 galleries and the mid-May sourcebook reception. Progress on the $0.5 billion real estate monetization plan. Macro Signals to Weigh Consumer sentiment at 49.8, a fresh 12-month low. Housing starts slipping to 1.47M in April. Red Flags Any softening of the $300M to $400M FCF range, or evasive answers on pending securities probes. Yesterday
With the bar set at -$2.05 non-GAAP EPS, the surprise risk lies in factors beyond the headline beat.
Tariff backorder unwind. Q4 lost ~$30 million in revenue to resourcing. Faster-than-expected resolution as China sourcing moves toward the 2% target could flip the guided -2% to -4% revenue decline. FX exposure. Euro and GBP swings now matter materially with RH Paris live and RH London/Milan launching Spring 2026. Housing inflection. Starts rebounded to 1,465 thousand units in April, the 81.8th percentile historically, challenging Friedman’s “worst in 50 years” framing. Litigation overhang. Investor law firms probing the Q4 miss adds sentiment risk absent from sell-side models. Earnings results are expected at 4:05 PM ET, while the earnings call will be at 5:00 PM ET.
Yesterday
What the Crowd Is Pricing In Polymarket traders are betting heavily on a beat. The active market “Will RH (RH) beat quarterly earnings?” shows a 98.5% implied probability of RH (NYSE:RH) topping the non-GAAP EPS threshold of -$2.05, with 9,614.76 contracts traded. Conviction has surged, with the “Yes” price climbing +48% over the past week and +53% in the last day.
The low bar matters. A negative consensus makes the hurdle easy to clear, even though RH missed in both Q3 and Q4 2025. History suggests the stakes are high: misses have averaged a -12.93% same-day move, while the lone beat delivered +6.93%. Shares trade at $153.23 into the earnings report, down 17% year-to-date.
Yesterday
Luxury home furnishings retailer RH (NYSE:RH) reports Q1 FY2026 results tonight at 4:05 PM ET. With shares at $153.14 and Polymarket pricing a 98.5% probability of beating the -$2.05 non-GAAP EPS bar, here is what to listen for on the 5:00 PM ET call.
Top 5 Analyst Questions How quickly is China sourcing tracking toward the 2% target from 16%? Is the $250M-$350M free cash flow range still intact? RH Paris productivity and RH Milan Spring 2026 readiness? Demand cadence versus the guided 2% to 4% revenue contraction? Path to deleveraging from 4.6x net debt/EBITDA? Key Topics & Buzzwords Listen for “strategic separation,” “climbing the luxury mountain,” and “demand vs. revenue.” Brand extension launch timing, hospitality (Guesthouses, RH One/Two/Three). Red Flags Full-year guide cut, widening negative shareholders’ equity beyond -$110.8 million, or fresh tariff backorder commentary. Yesterday
RH enters earnings under pressure after a difficult year marked by weak housing activity, tariff concerns, and investor skepticism around the company’s spending plans.
The company finished fiscal 2025 with roughly $2.6 billion in debt and net debt running at about 4.0x EBITDA, leaving little room for disappointment. Management has argued that current investments, including the RH Estates strategy, will drive long-term growth, but investors want evidence that the payoff is beginning to materialize.
Tonight’s report will be closely watched for signs that demand is stabilizing, luxury consumers remain engaged, and tariff pressures are easing. If RH can deliver on those fronts, there’s a potential for the recovery narrative to quickly regain momentum.
RH (NYSE: RH) reports first-quarter fiscal 2026 results today, June 11, at 4:05 PM ET. After two straight misses and a stock down 21.49% over the past year, this report carries unusual weight.
Proving the Investment Cycle Is Worth It Last quarter, RH posted adjusted EPS of $1.53, below the $2.20 consensus, and revenue of $842.6 million, below the $873.3 million consensus. Management blamed roughly $30 million in tariff-related backorders and $10 million in weather disruption. The stock dropped 19.5% intraday on the earnings report.
For the quarter ahead, CEO Gary Friedman guided to a revenue decline of 2% to 4% and an adjusted EBITDA margin of 5.5% to 6.5%, which incorporates roughly a 420-basis-point negative margin impact from international pre-opening costs. RH Paris opened on the Champs-Élysées last September, with RH London and RH Milan slated for Spring 2026. Shares have rebounded 15.09% over the past month to $153.50, suggesting some traders see the bar as already low enough. However, shares are up 3% today heading into Q1 earnings.
Consensus Estimates Metric Q1 FY2026 Consensus Full Year FY2026 Guide Adjusted EPS $(2.05) Implied from 14% to 16% EBITDA margin Revenue ~$792M 4% to 8% growth Adjusted Free Cash Flow Not guided $300M to $400M Estates Launch and Europe Will Decide Tonight’s Tone Tonight, I will be watching three things. First, the launch of RH Estates, the brand extension delayed from Fall 2025 to Spring 2026. Friedman told investors it will “become our largest and highest margin brand extension” and premiered at RH Milan during Salone.
Second, Europe. Friedman said Paris traffic in the first six days exceeded RH New York, and RH England demand ran +76% in Q2 and +47% in Q1. Investors will watch whether that comp momentum held through the London and Milan ramp, as international costs are eating into margins right now.
Third, tariffs and sourcing. CFO Jack Preston flagged “some tailwinds from the relatively lower rate that exists under Section 122 today” in the first half. RH has shifted its China sourcing target from 16% to 2% and aims for 52% U.S.-made upholstery. The macro backdrop helps modestly: housing starts hit 1.47 million in April, near the high end of the healthy range.
Polymarket traders are pricing a 98.5% probability of a beat against that loss estimate, signaling the bar may be low.
CORTE MADERA, Calif.--(BUSINESS WIRE)--RH (NYSE: RH) has released its financial results for the first quarter ended May 2, 2026, in a shareholder letter from Chairman and Chief Executive Officer Gary Friedman, available on the Investor Relations section of its website at ir.rh.com.
RH leadership will host a live conference call and audio webcast at 2:00 pm Pacific Time (5:00 pm Eastern Time) today. The live conference call may be accessed by dialing 800.715.9871 or 646.307.1963 for international callers (conference ID: 7345752). The call and replay can also be accessed via audio webcast at ir.rh.com.
ABOUT RH
RH (NYSE: RH) is a global curator of design, taste and style in the luxury lifestyle market. Operating across the United States, Canada, the United Kingdom and Europe, the Company offers collections through its retail galleries, sourcebooks and online at RH.com, RHModern.RH.com, RHBabyandChild.RH.com, RHTEEN.RH.com and Waterworks.com, with integrated hospitality experiences in galleries throughout the United States and internationally.
RH (RH - Free Report) came out with a quarterly loss of $1.97 per share versus the Zacks Consensus Estimate of a loss of $2.13. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +7.59%. A quarter ago, it was expected that this furniture and housewares company would post earnings of $2.21 per share when it actually produced earnings of $1.53, delivering a surprise of -30.77%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once.
RH, which belongs to the Zacks Consumer Products - Staples industry, posted revenues of $800.33 million for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 1.10%. This compares to year-ago revenues of $813.95 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
RH shares have lost about 17% since the beginning of the year versus the S&P 500's gain of 6.2%.
What's Next for RH?While RH has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for RH was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.78 on $951.58 million in revenues for the coming quarter and $5.35 on $3.62 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consumer Products - Staples is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
WD-40 (WDFC - Free Report) , another stock in the same industry, has yet to report results for the quarter ended May 2026.
This maintenance and cleaning product company is expected to post quarterly earnings of $1.58 per share in its upcoming report, which represents a year-over-year change of +2.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
WD-40's revenues are expected to be $171.8 million, up 9.5% from the year-ago quarter.
Arhaus Stock Drops to 52-Week Low After Q1 EarningsRH NYSE: RH raised its fiscal 2026 outlook after first-quarter revenue and adjusted EBITDA margin exceeded the high end of its expectations, even as the luxury home furnishings company said tariff-related resourcing kept back orders and special orders elevated.
Chairman and Chief Executive Officer Gary Friedman said first-quarter revenue was $800.3 million and adjusted EBITDA margin was 7.1%. He said results came despite back order and special order balances that were approximately $75 million higher than a year earlier, primarily due to tariff-related resourcing.
Get RH alerts:
MarketBeat Week in Review – 04/27 - 05/01“As a result of our better-than-expected first quarter results, we are raising our outlook for fiscal year 2026,” Friedman said while reading the company’s shareholder letter.
RH Raises Fiscal 2026 Outlook For fiscal 2026, RH now expects:
Revenue growth of 4.5% to 8%. Adjusted EBITDA margin of 14.2% to 16%. Adjusted free cash flow of $300 million to $400 million. Could RH’s Recent 40% Slide Represent a Buying Opportunity?The company said the full-year outlook includes an approximate 270-basis-point negative impact to adjusted EBITDA margin from pre-opening and start-up costs tied to international expansion.
For the second quarter, RH guided for revenue growth of 0.5% to 2.5% and adjusted EBITDA margin of 11.5% to 13%. That outlook includes an approximate 380-basis-point negative adjusted EBITDA margin impact from pre-opening and start-up costs to support international expansion.
Friedman said the company expects its business to accelerate from roughly flat revenue growth in the first half to about 12% growth in the second half. He identified three elements behind that expected acceleration: backlog reduction contributing 4.5 percentage points, new store growth adding 2.5 percentage points and new concept growth from RH Estates contributing five points.
Chief Financial Officer Jack Preston clarified during the question-and-answer session that the $75 million backlog figure represents back orders and special orders above the company’s normal rate. “This is elevated because of unnatural things happening,” Preston said, citing resourcing and transportation impacts.
RH Estates Takes Center Stage Much of the call focused on RH Estates, a new concept Friedman described as a major step in the company’s effort to build a global luxury brand. Friedman said the concept is intended to bring high-end, trade-only design and craftsmanship to a broader audience through RH’s platform.
Friedman said the company has aggregated brands and ateliers including Dmitriy & Co, Joseph Jeup, Dennis & Leen, Formations, Waterworks and Michael Taylor. He characterized RH Estates as an effort to remove barriers that have historically limited consumer access to certain categories of luxury home design.
“With the launch of RH Estates, we are removing the barriers that have segregated taste from scale,” Friedman said. “We are amplifying the work of the world’s most elite designers, artisans, and manufacturers on our global platform.”
Friedman also outlined new customization capabilities, including RH Bespoke Furniture and RH Couture Upholstery. He said RH Bespoke will allow interior designers and architects to specify dimensions for case goods such as dressers, dining tables, sideboards and cabinets. RH Couture Upholstery will include custom sizing and customer’s own material, or COM, for sofas, sectionals, chairs, ottomans and beds.
In response to a question from Guggenheim analyst Steven Forbes about the addressable market, Friedman said the traditional classic market represents roughly 60% of the luxury home market and that RH is “vastly under-penetrated” in that category. He said the company now views its business around three major aesthetic segments: Estates, Interiors and Modern.
Trade Program Aimed at Designers and Architects RH also plans to introduce an exclusive program for interior designers, architects and trade members. Friedman said the program is designed to compensate professionals for the value they create for consumers and to encourage them to use RH’s platform.
During the call, Friedman said RH already has a large trade business and provides services such as design support, renderings, presentations, delivery and installation assistance. He said the company has not historically offered the same kind of incentive structure to the design trade that some professionals use in their business models.
“Interior designers have a markup model, right? An hourly model. They kind of need both to make the business work,” Friedman said. He added that RH Estates makes this the right time to more directly engage high-end designers because the new assortment is aimed at the top of the market.
When Jefferies analyst Jonathan Matuszewski asked why now was the right time to pursue a loyalty program that compensates trade clients, Friedman said the timing is tied to Estates. “Estates opens up the very top of the market for this brand,” he said.
International Expansion Remains a Major Investment Friedman described RH Paris, Milan and London as key foundational openings for the company’s global luxury ambitions. He said the three markets are important to earning recognition from European, U.K. and global customers.
Asked by Wells Fargo analyst Zach Fadem about the initial response from Milan and expectations for Paris, Milan and London, Friedman said the company is still building brand awareness, customer relationships and design books in Europe. He said London is expected to be an accelerator for the broader international platform.
“London is the accelerator for all of it,” Friedman said. “Because everybody goes to London.” He said London has higher brand awareness for RH than some other international markets, citing expats and customer familiarity with the brand.
Preston said first-quarter pre-opening costs ended up at about 450 basis points of margin impact, compared with prior commentary of 420 basis points. He said the second-quarter guide includes a 380-basis-point impact, while the full-year figure is expected to be 270 basis points.
Margins, Cash Flow and Balance Sheet Executives said RH expects margin leverage as investments peak and sales improve. Friedman said the company is not assuming a recovery in the housing market in its guidance and said he would be surprised if RH did not beat the numbers if the market worsened, absent more severe macroeconomic disruption.
On tariffs, Preston said the free cash flow guidance does not assume any additional tariff refunds. “The refunds started coming, but they’ve been kind of paused,” he said.
On the balance sheet, Morgan Stanley analyst Simeon Gutman asked about RH’s goal of becoming debt-free by 2029. Friedman said debt reduction remains a priority and pointed to planned asset sales of $200 million to $250 million per year over the next two years. He said RH recently completed a transaction related to its Aspen real estate that gave the company 100% control of eight properties, which he said could help monetization efforts.
Preston said free cash flow is expected to build over time and reiterated that making progress on debt reduction remains a focus. Friedman added that as spending declines and sales rise, the company expects asset sales and business performance to support the balance sheet.
Friedman closed the call by thanking RH employees and saying the company is entering “one of the most important times in the history of RH,” driven by new products, international galleries and the company’s broader luxury positioning.
About RH NYSE: RHRH, formerly Restoration Hardware, is a design-driven luxury retailer specializing in high-end home furnishings, décor, textiles, lighting and outdoor living products. The company offers a curated collection of furniture pieces—including seating, casegoods, beds and dining items—alongside rugs, art and decorative accessories. RH's product lines are organized into distinct collections, each reflecting a cohesive design philosophy and premium craftsmanship aimed at the residential and hospitality markets.
Founded in 1979 in Eureka, California, by Stephen Gordon, Restoration Hardware began as a small warehouse in Northern California.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Should You Invest $1,000 in RH Right Now?Before you consider RH, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and RH wasn't on the list.
While RH currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link to see MarketBeat's guide to investing in 5G and which 5G stocks show the most promise.
This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.
Copyright 2026 Zacks Investment Research 101 N Wacker Drive, Floor 15, Chicago, IL 60606
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.00% per year. These returns cover a period from January 1, 1988 through May 4, 2026. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer.
Visit Performance Disclosure for information about the performance numbers displayed above.
Visit www.zacksdata.com to get our data and content for your mobile app or website.
Real time prices by BATS. Delayed quotes by Sungard.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
This site is protected by reCAPTCHA and the Google Privacy Policy, DMCA Policy and Terms of Service apply.
RH (NYSE:RH) reported better-than-expected first-quarter financial results and raised its FY2026 sales guidance on Thursday.
RH reported quarterly losses of $1.97 per share, which beat the analyst consensus estimate of losses of $2.11 per share. The company reported quarterly sales of $800.328 million, which beat the analyst consensus estimate of $792.780 million.
RH raised its FY2026 sales guidance from $3.577 billion-$3.715 billion to $3.594 billion-$3.715 billion.
RH shares fell 5.8% to trade at $149.95 on Friday.
These analysts made changes to their price targets on RH following earnings announcement.
Baird analyst Peter Benedict maintained RH with a Neutral and raised the price target from $125 to $150. Wells Fargo analyst Zachary Fadem maintained the stock with an Overweight rating and raised the price target from $160 to $175. Stifel analyst W. Andrew Carter maintained RH with a Hold and raised the price target from $110 to $130. Considering buying RH stock? Here’s what analysts think:
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
RH RH is experiencing a decline in stock value following its Q1 report, where below-consensus Q2 guidance overshadowed better-than-expected results. The luxury home furnishings retailer posted an adjusted loss of $1.97 per share, with revenue decreasing by 1.7% year-over-year to $800.3 million. For Q2, RH anticipates revenue growth of only 0.5-2.5%, amounting to approximately $904-922 million, which falls short of market expectations. The company did increase the lower end of its FY26 revenue outlook, now forecasting growth of 4.5-8.0%, or around $3.59-3.73 billion, but this projection is contingent on a significant acceleration in the latter half of the year.
Revenue Timing: Q1 revenue was negatively impacted by about $45 million due to high backorder and special order balances, which were approximately $75 million above last year, largely due to tariff-related resourcing. RH expects these balances to stay elevated in Q2 before normalizing by year-end. Second-Half Bridge: Management forecasts revenue growth to shift from roughly flat in the first half to around 12% in the second half. This growth includes 4.5 points from backlog reduction, 2.5 points from new store openings, and 5.0 points from new concept growth, primarily RH Estates. Margin Framework: Margins faced pressure, with the adjusted EBITDA margin dropping to 7.1% from 13.1% last year due to gross margin compression and expense deleverage. RH projects a Q2 adjusted EBITDA margin of 11.5-13.0% and an FY26 adjusted EBITDA margin of 14.2-16.0%, indicating a significant recovery from Q1 levels, although international pre-opening and startup costs continue to be a burden. Platform Expansion: RH is focused on establishing a global luxury brand, with Paris, Milan, and London serving as key galleries for international visibility. Initiatives like RH Estates, RH Bespoke Furniture, and RH Couture Upholstery are part of this strategy to enter more customized, designer-led categories. Despite RH's Q1 results exceeding expectations, investor attention is shifting to the weaker Q2 guidance and the ambitious second-half growth implied by the FY26 outlook. The company suggests that some immediate challenges stem from timing issues related to elevated backorder and special order balances. However, transitioning from flat first-half revenue growth to approximately 12% in the second half remains a significant challenge, given the ongoing difficulties in the housing market and uneven demand for luxury home furnishings. While RH anticipates revenue growth in Q2, the 0.5-2.5% growth forecast is considerably below expectations, and the adjusted EBITDA margin still needs substantial improvement from Q1 levels to align with the full-year framework. Nevertheless, RH's long-term vision surrounding international galleries, RH Estates, Bespoke Furniture, and Couture Upholstery remains appealing, as it aims to create a broader luxury platform that extends beyond the housing cycle. However, with Q2 guidance disappointing, international startup costs impacting profitability, and a recovery that heavily relies on second-half performance, investor concerns regarding the timing and sustainability of the rebound persist.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Earnings Top ExpectationsRH reported a first-quarter loss of $1.97 per share, beating analysts’ estimates for a loss of $2.11 per share. Revenue rose to $800.3 million, ahead of the consensus estimate of $792.8 million.
RH projected second-quarter revenue of $903.6 million to $921.6 million, below the Wall Street consensus estimate of $937.8 million.
Despite the softer quarterly outlook, RH raised its fiscal 2026 revenue guidance. The company now expects full-year sales of $3.594 billion to $3.715 billion, up from its prior forecast of $3.577 billion to $3.715 billion. The updated range compares with the analyst estimate of $3.619 billion.
RH Analysts Raise Price ForecastsFollowing the results, several analysts increased their price forecasts on the stock.
Baird analyst Peter Benedict maintained a Neutral rating and raised his price forecast to $150 from $125. Wells Fargo analyst Zachary Fadem reiterated an Overweight rating and increased his price forecast to $175 from $160. Stifel analyst W. Andrew Carter maintained a Hold rating and lifted his price forecast to $130 from $110. Guggenheim Sees Margin Expansion AheadGuggenheim analyst Steven Forbes reiterated a Buy rating on the stock with a $200 price forecast.
Forbes said RH’s first-quarter performance exceeded expectations and marked the first time since the second quarter of 2023 that results reached the high end of management’s guidance range. He also noted adjusted EBITDA came in about 30% above expectations.
The analyst said RH’s second-quarter guidance and implied second-half outlook support expectations for accelerating market share gains and improving profitability.
Forbes added that RH is nearing the end of a major product refresh cycle, including the upcoming RH Estates launch, while international expansion efforts, including the planned opening of RH London in Mayfair, could serve as important catalysts. As a result, he said the next 12 months “could reshape the consensus investment narrative” around the company.
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
