Latest news with #TrefisHighQualityPortfolio
Forbes
13-06-2025
- Business
- Forbes
Q1 Profit Can't Justify RH's $180 Price Tag
GRAYS, ENGLAND - FEBRUARY 5: A general view of an RH Outlet furniture retail store at Lakeside ... More Retail Park on February 5, 2024 in Grays, United Kingdom. (Photo by) Note: RH FY'24 ended on February 1, 2025 RH stock, the luxury home furnishings retailer formerly known as Restoration Hardware, surged over 15% in after-hours trading on Thursday after the company reaffirmed its full-year forecast and discussed strategies to address rising tariffs. RH anticipates revenue growth of 10% to 13% for FY 2025, demonstrating resilience in the face of macroeconomic challenges. Yet, the excitement quickly subsided—shares fell 1.18% in after-hours trading to $178.84 following a mixed Q1 earnings report that exceeded EPS expectations but fell short on sales forecasts. For investors looking for growth paired with lower volatility, the Trefis High Quality Portfolio has outperformed the S&P 500, delivering 91% returns since its inception, providing a steadier experience during turbulent times. RH generates revenue through a combination of high-touch showrooms and lavishly curated catalogs, available both in print and online. Its product offerings include furniture, lighting, textiles, bathware, garden products, and even teen furnishings—aimed at affluent consumers with a focus on design-forward aesthetics and premium prices. The company reported a net income of $8.04 million ($0.40 per share) for Q1, reversing a loss of $3.63 million ($0.20 per share) from the previous year. Revenue increased 12% year-over-year to $814 million, coming just short of analyst expectations. Adjusted operating margin hit 7%, with EBITDA margin at 13.1%. Nevertheless, RH contends with significant obstacles: a sluggish housing market—characterized by CEO Gary Friedman as the 'toughest in almost 50 years'—and escalating tariff pressures threaten future earnings. The company detailed aggressive supply chain changes: RH is shifting production away from China, with imports from the country expected to decrease from 16% in Q1 to just 2% by Q4. The company aims to produce 52% of its upholstered goods domestically in the U.S. and 21% in Italy by year-end. However, these adjustments come with costs—tariffs are anticipated to impact Q2 revenue by approximately six percentage points. RH has also postponed the introduction of a new concept to spring 2026 amid tariff uncertainties. Despite these challenges, it is advancing with global expansion plans, with a flagship store set to open on Paris' Champs Élysées in September. The company intends to launch 7–9 new galleries each year, focusing on major cities such as London and Milan. Investors should be wary of RH's historical performance during downturns. The stock fell 71% during the 2022 inflation shock—nearly three times the S&P 500's 25% drop—and 68% during the 2020 pandemic crash. While it bounced back quickly post-COVID, it has yet to regain its 2021 highs. RH's heightened sensitivity to macroeconomic shocks raises questions about its sustainability during a potential recession. Our dashboard How Low Can Stocks Go During A Market Crash captures the performance of key stocks during and after the last six market crashes. With a valuation of approximately 45× forward earnings, RH trades at a significant premium compared to both its five-year average (38×) and the S&P 500 (26×). Its price-to-free-cash-flow ratio is particularly concerning (>200x, versus 21x for the S&P index), indicating that investor expectations may be outpacing the underlying fundamentals. Following a post-pandemic demand boom in FY 2020, RH experienced a turbulent stretch from FY 2021 through FY 2023 as rising mortgage rates, inflation, and declining housing markets pressured results. FY 2024 provided a degree of recovery, however, investor confidence remains fragile. Tariffs and the weak housing market continue to impact the outlook, despite operational enhancements. RH is undertaking a significant shift—restructuring its supply chain, expanding globally, and enhancing margins. However, the stock remains volatile and highly valued, with a history of significant declines during challenging times. Trefis partners with Empirical Asset Management—a wealth management firm in the Boston area—whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has integrated the Trefis HQ Portfolio into its asset allocation framework to deliver better returns and reduced risk for clients compared to the benchmark index—a smoother experience as evidenced in HQ Portfolio performance metrics.
Forbes
15-05-2025
- Business
- Forbes
What's Happening With CoreWeave Stock?
A laptop keyboard and CoreWeave logo displayed on a phone screen are seen in this illustration photo ... More taken in Krakow, Poland on March 28, 2025. (Photo by Jakub Porzycki/NurPhoto via Getty Images) CoreWeave (NASDAQ: CRWV), an AI infrastructure provider, recently announced its Q1 results, reporting a loss of $1.49 per share on revenue of $982 million. This exceeded market expectations of $853 million in revenue. However, its capital expenditures plan of $20-23 billion was much higher than the $18 billion anticipated by the analysts and it didn't sit well with investors - triggering a decline in the stock in after-hours trading. Separately, see – Is UNH Stock Now A Falling Knife? Since its IPO at $40 per share in March, CRWV stock has surged past $65 earlier this week, significantly outperforming the NASDAQ index's 11% gain over the same period. CoreWeave's strong backlog of over $25 billion has contributed to its stock's impressive performance. However, if you prefer a less volatile investment alternative, consider the High Quality Portfolio, which has consistently outpaced the S&P 500 and has delivered over 91% returns since inception. CoreWeave's Q1 revenue of $982 million reflects an impressive 420% year-over-year increase. CoreWeave has secured significant contracts with leading AI labs, hyperscalers, and enterprises, including OpenAI, Microsoft, IBM, Meta, and Mistral AI, aiding its revenue growth. The first quarter also saw OpenAI solidify its relationship with CoreWeave by committing to a five-year deal worth up to $11.9 billion. This significant agreement underscores the growing importance of CoreWeave's infrastructure for OpenAI. Additionally, CoreWeave's adjusted EBITDA margin increased by 700 bps to 62%, up from 55% in the previous year's quarter. However, the adjusted net loss widened to $150 million from $24 million in the prior-year quarter. Higher revenue offset by a contraction in net margin resulted in adjusted net loss of $0.61 per share. Looking ahead, CoreWeave expects Q2'25 revenue of $1.08 billion and full-year 2025 revenue of $5.0 billion, at the mid-point of the provided range. This fares better than the consensus estimates of $987 million and $4.6 billion, respectively. CRWV stock has shown some volatility since its debut. In contrast, the Trefis High Quality Portfolio, which consists of 30 stocks, is significantly more stable. It has also comfortably outperformed the S&P 500 over the past four years. Why? This portfolio comprises stocks that have historically provided stronger returns with lower risk compared to the broader index, offering a more predictable performance, as evident in the HQ Portfolio performance metrics. Given the current economic uncertainty surrounding tariffs and ongoing trade disputes, could CoreWeave sustain its upward trajectory? Since the stock was only listed last year, there is no historical data to assess its historical valuation multiple. At its current price of approximately $63 (after market hours), CRWV trades at 13 times trailing revenue. With sales increasing by over 700% in 2024, over 400% in Q1, and it's expected to grow 2.3x this year, the company's high valuation multiple appears justified. However, the company's high capital expenditures and widening losses remain key near-term concerns.
Forbes
22-04-2025
- Business
- Forbes
What's Happening With GE Stock?
Trefis GE Aerospace (NYSE: GE) delivered a strong first-quarter performance, beating expectations on both revenue and adjusted earnings. The company reported revenue of $9.94 billion and adjusted earnings per share of $1.49, exceeding the consensus estimates of $9.04 billion and $1.26, respectively. This robust performance follows a solid prior quarter, driven by improved pricing and higher service contributions. Investor enthusiasm for GE stock—now centered on aviation following its healthcare and energy spin-offs—is reflected in its 6% year-to-date gain, outpacing the S&P 500's 12% decline. For those seeking steadier returns than individual stocks offer, the High-Quality portfolio, which has delivered over 91% returns since inception, is worth considering. GE posted solid financial results for Q1 2025, with revenue growing 11% year-over-year to $9.94 billion. Our GE Aerospace's revenue dashboard provides more detail. This growth, along with a 460 basis point year-over-year rise in adjusted operating margin to 23.8%, led to a 60% year-over-year increase in earnings per share, which reached $1.49. From a segment perspective, commercial engines and services stood out with 14% growth year-over-year, totaling $6.98 billion, while defense and propulsion technologies increased by 1% to $2.32 billion. Looking forward, GE's momentum is projected to continue, backed by a strong aftermarket business. The company reaffirmed its 2025 guidance, targeting low double-digit revenue growth from $35.1 billion in 2024 and adjusted EPS in the range of $5.10 to $5.45, up from $4.60 last year. Total orders rose 12% year-over-year to $12.3 billion in the quarter, further underscoring this positive trend. GE stock has been on an upward trend following its Q1 earnings release. Over a four-year span, GE's stock performance has been volatile compared to the S&P 500, with yearly returns of 10% in 2021, -11% in 2022, 94% in 2023, and 65% in 2024. The Trefis High Quality Portfolio, featuring 30 selected stocks, offers lower volatility and has significantly outperformed the S&P 500 in the same timeframe. Why? These stocks have delivered higher returns with less risk, as shown in the HQ Portfolio performance metrics. Given the prevailing macroeconomic uncertainty, including interest rate dynamics and geopolitical tensions, GE might experience performance swings similar to 2021. However, with the stock's recent climb, it may still offer growth potential. Currently trading at around $185, GE stock is valued at 36x trailing earnings, slightly above its two-year average P/E of 35x. Given the strong sales and earnings growth driven by margin expansion, a modest increase in valuation multiples appears justified. While GE stock may still have upside, it's insightful to explore how GE Aerospace's Peers compare on critical performance indicators. For broader benchmarking, check out Peer Comparisons. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
Forbes
16-04-2025
- Business
- Forbes
Up 12% In A Week, What's Happening With AVGO Stock?
Illustration of BROADCOM, France, March 7, 2025. (Photo by Riccardo Milani / Hans Lucas / Hans ... More Lucas via AFP) (Photo by RICCARDO MILANI/Hans Lucas/AFP via Getty Images) Broadcom Inc. (NASDAQ: AVGO) stock has risen 12% over the past five days due to two key developments: a broader market rebound after President Trump suspended reciprocal tariffs for 90 days, and the company's announcement of a $10 billion share buyback program. Despite the recent gains, AVGO is still down over 20% this year. Such fluctuations are not unusual for the stock—AVGO fell 36% during the 2022 inflation-driven downturn and dropped 48% during the COVID-19-related market selloff in 2020. However, for investors seeking a potentially more stable and high-performing alternative, consider the Trefis High Quality Portfolio, which includes 30 stocks with a strong record of consistently outperforming the S&P 500 over the past four years. Broadcom's key financial indicators highlight its strong foundation: For long-term investors, the recent decline in AVGO stock could offer a compelling entry point, considering the company's solid fundamentals and AI leadership. Those sensitive to volatility should consider hedging, consulting a financial advisor, or diversification, such as the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark to produce strong returns for investors. A calm, strategic approach is crucial for wealth generation during market volatility. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
Forbes
16-04-2025
- Business
- Forbes
Will Super Micro Stock's Outperformance Last?
LAS VEGAS, NEVADA - MARCH 10: Charles Liang, CEO of Supermicro, and Liz Claman speak onstage during ... More the HumanX AI Conference 2025 at Fontainebleau Las Vegas on March 10, 2025 in Las Vegas, Nevada. (Photo by Bigfor HumanX Conference) Super Micro Computer stock has risen roughly 10% so far this year, compared to the broader S&P 500, which has dropped about 8% year-to-date. Despite this gain, the stock is still down nearly 70% from its all-time highs reached in March 2024. Recently, a few positive developments—such as growing demand for its AI server systems and some resolution of corporate governance concerns from last year—have helped lift sentiment. So, is now the right time to consider buying SMCI stock? Although SMCI stock shows potential, investing in a single company carries risks. In contrast, the Trefis High Quality Portfolio, composed of 30 stocks, has consistently outperformed the S&P 500 over the past four years. Why? Because these stocks have delivered superior returns with lower volatility compared to the broader index, as demonstrated in the HQ Portfolio performance metrics. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
