Core Viewpoint - The housing market is expected to improve in 2026, with strong underlying factors in place despite current challenges [2][8]. Market Dynamics - Inventory levels have been adjusted across most markets, and consumer intent to buy remains strong, with mortgage rates down approximately 100 basis points since January [3][5]. - Builder inflation on input costs is moderating, and current trading is at about nine times forward earnings, indicating a favorable setup for builders [4]. Home Price Trends - Home prices have appreciated by 56% since 2019, contributing to a significant amount of home equity, estimated at $35 trillion [4][5]. - Despite recent pullbacks, there is no expectation for prices to continue falling due to tight inventory and strong underlying demand [5]. Consumer Confidence - Consumer confidence is currently low, described as being at a global financial trough, which is impacting the market [7]. - Improvement in consumer confidence is necessary for the housing market to stabilize and grow, with signs of stabilization beginning to emerge [8]. Builder Strategies - Builders are adapting by buying down mortgage rates, constructing smaller homes, and optimizing build processes, which gives them an advantage over the existing home market [10][11]. - The ability to efficiently manage costs and build processes will support builders' performance in the upcoming year [11]. Investment Outlook - The current stock valuations reflect significant pessimism, suggesting that there may be an opportunity for growth when consumer confidence begins to recover [12][13]. - A bottoming out of consumer confidence is anticipated to trigger a rally in builder stocks, indicating a potential investment opportunity [11][13].

Core Viewpoint - RH shares increased despite missing Q3 earnings estimates and lowering full-year guidance, indicating investor focus on long-term expansion plans rather than short-term challenges [1] Q3 Miss & Guidance Cuts - RH reported Q3 earnings of $1.71 per share, missing the analyst estimate of $2.16 by 20.87% [2] - Telsey Advisory Group analyst Cristina Fernández reiterated a Market Perform rating and reduced the price target from $220 to $185 [2] - Key factors for the earnings miss included tariff pressures on backlogs and costs associated with the opening of RH Paris [3] - The company narrowed its 2025 sales growth guidance to 9.0%–9.2% from a previous range of 9%–11% and cut the operating margin outlook to 11.6%–11.9% from 13%–14% [3] Revised Analyst Outlook - Fernández lowered the 2025 EPS estimate to $7.20 from $9.10, projecting $3.47 billion in revenue [4] - For 2026, the EPS forecast was cut to $10.15 from $12.35, citing ongoing headwinds from tariffs and upcoming gallery openings in London and Milan [4] Strategic Pivot: RH Antiques - Despite the cuts, the company plans to launch RH Antiques in spring 2026, shifting focus towards classic styles after years of modern emphasis [5] - This initiative follows the acquisition of the Michael Taylor brand and will coincide with the RH Milan opening in April [5] - New antique galleries are planned for San Francisco, West Hollywood, and Greenwich, Connecticut [5] Strong Unit Economics - The company expects to generate $250 million to $300 million in free cash flow for 2025, with capital spending anticipated to decrease as international investments wind down [6] - RH shares were up 8.77% at $166.76 at the time of publication [6]

Core Viewpoint - RH shares increased despite missing Q3 earnings estimates and lowering full-year guidance, indicating investor focus on long-term expansion plans rather than short-term challenges [1] Q3 Miss & Guidance Cuts - RH reported Q3 earnings of $1.71 per share, missing the analyst estimate of $2.16 by 20.87% [2] - The company narrowed its 2025 sales growth guidance to 9.0%–9.2% from a previous range of 9%–11% and cut its operating margin outlook to 11.6%–11.9% from 13%–14% [3] Revised Analyst Outlook - Analyst Cristina Fernández lowered her 2025 EPS estimate to $7.20 from $9.10, based on projected revenue of $3.47 billion [4] - For 2026, the EPS forecast was cut to $10.15 from $12.35, citing tariff headwinds and upcoming gallery openings in London and Milan [4] Strategic Pivot: RH Antiques - Despite the cuts, the company plans to launch RH Antiques in spring 2026, shifting focus to classic styles after years of modern emphasis [5] - This initiative follows the acquisition of the Michael Taylor brand and will coincide with the RH Milan opening in April, with new antique galleries planned for San Francisco, West Hollywood, and Greenwich, Connecticut [5] Strong Unit Economics - The company expects to generate $250 million to $300 million in free cash flow for 2025, with capital spending anticipated to decrease as international investments wind down [6] - RH shares were up 8.77% at $166.76 at the time of publication [6]

The final session of the week saw red dominate Wall Street screens, as stocks slid broadly following a renewed tech-led sell-off. • Rivian Automotive stock is approaching key resistance levels. What’s behind RIVN new highs?Shares of Broadcom Inc. (NASDAQ:AVGO) , one of the market's most closely watched artificial intelligence plays, plunged more than 11% despite topping Wall Street's quarterly expectations.Pressure on the AI theme carried over from Thursday, when Oracle Corp. (NYSE:ORCL) shares sank 11% aft ...

Core Insights - RH reported mixed results for Q3 fiscal 2025, with adjusted earnings missing estimates while net revenues exceeded expectations and increased year-over-year [1][4][8] Revenue Performance - Adjusted EPS was $1.71, missing the Zacks Consensus Estimate of $2.13 by 19.7%, down from $2.48 in the same quarter last year [4] - Net revenues reached $883.8 million, surpassing the consensus mark of $882.9 million by 0.1% and reflecting an 8.9% year-over-year increase [4] - Revenue from the RH segment grew 8.8% year-over-year to $835.8 million, while Waterworks revenues rose 9.9% to $48 million [4] Market Context - RH demonstrated resilience with solid revenue growth despite one of the weakest housing markets in decades and ongoing tariff-related disruptions [2] - The company achieved an 18% revenue increase over a two-year period, highlighting its strong market position amid challenging conditions [5] Margin Analysis - Adjusted gross margin contracted by 40 basis points to 44.1% [6] - Adjusted operating margin decreased by 340 basis points year-over-year to 11.6% [6] - Adjusted EBITDA fell 7.6% year-over-year to $155.8 million, with an adjusted EBITDA margin contracting 320 basis points to 17.6% [6] Financial Position - As of Nov. 1, 2025, cash and cash equivalents were $43.1 million, up from $30.4 million at the end of fiscal 2024 [7] - Merchandise inventories were valued at $875 million, down from $1.02 billion at the end of fiscal 2024 [7] - The company ended the quarter with a net debt of $2.4 billion and a net debt-to-adjusted EBITDA ratio of 4.1x [7] Future Guidance - For Q4 fiscal 2025, RH expects net revenues to grow between 7% and 8% year-over-year [10] - Adjusted operating margin is projected to be between 12.5% and 13.5%, up from 11.3% in the prior-year quarter [10] - Adjusted EBITDA margin is forecasted to be between 18.7% and 19.6%, an increase from 17.1% reported in the previous year [10] Revised Fiscal Guidance - RH has lowered its fiscal 2025 revenue growth guidance to a range of 9% to 9.2%, down from the previous expectation of 9% to 11% [11] - Adjusted operating margin is now expected to be between 11.6% and 11.9%, down from the prior range of 13% to 14% [11] - Adjusted EBITDA margin is forecasted to be between 17.6% and 18%, reduced from the previous expectation of 19% to 20% [11] - The company still anticipates free cash flow to be between $250 million and $300 million [12]

Core Viewpoint - RH, an upscale American furniture maker, has cut its 2025 guidance due to the ongoing impact of tariffs on the industry, despite reporting a 9% increase in revenues to $884 million for the third quarter [1][2]. Financial Performance - The company reported a revenue increase of 9% to $884 million, which was better than expected [1]. - The adjusted operating margin was 11.6%, falling short of the 12.5% midpoint guidance due to higher-than-expected tariff expenses [1][2]. Revised Outlook - RH has revised its 2025 revenue growth outlook to 9% to 9.2%, down from a previous forecast of 9% to 11% [2]. - The adjusted operating margin forecast has been lowered to 11.6% to 11.9%, down from 12% to 13% [2]. - The adjusted EBITDA margin is now expected to be 17.6% to 18%, reduced from 19% to 20% [2]. Tariff Impact - The company indicated that the outlook includes a negative impact of approximately 210 basis points on operating margin due to start-up costs for international expansion and a 90 basis point impact from tariffs, net of mitigation [3]. Market Reaction - Following the better-than-expected revenue results, RH shares rose by 10.64% in early trading, reaching $168.64 [4]. - However, RH shares have declined by about 60% over the past year, significantly affected by U.S. trade policies [4]. Analyst Ratings - The Telsey Group maintained a market perform rating but reduced its target price from $220 to $185, citing concerns over incremental tariffs and costs associated with new international gallery openings [5][6]. - TD Cowen also lowered its target price from $265 to $200 while maintaining a buy rating [6]. Challenges - RH faces challenges related to delivering backorders purchased at pre-tariff prices, which are now subject to tariffs, and higher expenses linked to the opening of RH Paris [6][7].

Core Insights - U.S. stocks experienced a decline, with the Nasdaq Composite dropping over 400 points on Friday [1] - RH reported third-quarter earnings of $1.71 per share, missing analyst estimates by 20.87%, while quarterly revenue of $883.81 million exceeded expectations [1] Company Performance - RH shares increased by 5.8% to $162.14 following the earnings report [2] - Lululemon Athletica Inc. saw a 10.1% gain to $205.80 after beating third-quarter estimates and raising full-year guidance [3] - Frequency Electronics Inc. reported better-than-expected second-quarter sales, leading to a 27.2% increase in share price to $45.84 [3] - CCC Intelligent Solutions Holdings Inc. announced a $500 million share repurchase authorization, resulting in a 6.3% increase in share price to $7.68 [3] Market Reactions - Canopy Growth Corp. shares rose 35.4% to $1.53 due to potential federal marijuana regulation changes [3] - Rivian Automotive Inc. gained 14.9% to $18.88 after announcing entry into the autonomous driving sector with a new AI chip [3] - Clear Secure Inc. experienced an 11.3% increase to $40.36 after an upgrade from JP Morgan [3]

Group 1 - The core investment strategy suggested is to "buy high and sell low," focusing on earnings estimates rather than traditional valuation metrics [1][2] - Companies should be evaluated based on the achievability of their earnings estimates, rather than their current stock prices [2][3] - There is a potential shift in investment focus from large-cap stocks to small and medium-cap stocks, although this is debated [3] Group 2 - A significant transition in 2026 is anticipated, particularly regarding the expansion of multiples for productivity beneficiaries, as current revenue beneficiaries like Broadcom and Nvidia are no longer seeing expanding multiples [4][6] - Healthcare and financial sectors are highlighted as key areas for investment, with expectations of margin expansion and lower sensitivity to external factors like tariffs [5] - The data center sector is projected to grow from $500 billion to potentially $1 trillion by 2027, indicating strong growth opportunities [8] Group 3 - The performance of stocks often reflects market sentiment ahead of earnings reports, suggesting that buying should occur well in advance of earnings announcements [7] - M&A activity is scrutinized, with historical data indicating that acquirers often underperform, particularly when deals are perceived as expensive or poorly structured [10][11]

分组1 - Stock futures show a mixed picture, with NASDAQ under pressure due to an AI-led downturn in tech stocks, while Dow futures are higher after record closes for both the Dow and S&P 500 [2][6] - All 11 S&P 500 sectors are in the green year-to-date, indicating a broadening stock rally beyond tech, which has been the primary market driver this year [3][8] - Broadcom reported better-than-expected earnings and revenue but saw its shares decline due to a sales outlook that did not meet high investor expectations, despite a backlog of $73 billion in AI product orders [4][14] 分组2 - Lululemon's CEO Calvin McDonald will depart in January, with analysts reacting positively to the news as the stock had declined over 50% this year [5][30] - Despite the CEO change, Lululemon's latest earnings results beat analyst expectations, and the company raised its full-year outlook [5][36] - The company has struggled with product innovation and competition, leading to a series of CEO changes over the years, indicating ongoing challenges in maintaining market position [30][32] 分组3 - Cannabis stocks surged following reports of President Trump's plans to ease federal restrictions on marijuana, which could significantly impact the industry by lowering taxes and increasing financing accessibility [40][41] - Fairmy shares fell over 40% after a tenant terminated a construction funding agreement, although the company remains optimistic about meeting its power delivery schedule [42][43] - RH shares rose after reporting stronger revenue growth than competitors, despite challenges in the housing market [44]

Our next guest says, "Buy high and sell low." The opposite of the old Wall Street outage. Adam Parker, founder and CEO of Trivari Research, joins us this morning for Think from the Road. Adam, good to see you.>> Hey, Carl. Hey, Sarah. How are you.>> All right, so explain that one to us. >> You know, valuation really doesn't work from picking stocks. We've seen that.You can't buy super cheap stocks. And we know that you also can't uh buy stocks that are down from 52- week highs. They they underperform.So the ...