Williams-Sonoma (WSM) Suffers a Larger Drop Than the General Market: Key Insights

In the latest trading session, Williams-Sonoma (WSM) closed at $185.77, marking a -1.39% move from the previous day. This change lagged the S&P 500's daily loss of 0.08%. Elsewhere, the Dow saw a downswing of 0.61%, while the tech-heavy Nasdaq appreciated by 0.08%.

Shares of the seller of cookware and home furnishings have depreciated by 13.1% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 1.45%, and the S&P 500's loss of 2.16%.

The investment community will be closely monitoring the performance of Williams-Sonoma in its forthcoming earnings report. The company is expected to report EPS of $2.89, down 11.89% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $2.4 billion, indicating a 2.49% downward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $8.7 per share and revenue of $7.86 billion, indicating changes of -1.02% and +1.91%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Williams-Sonoma. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.1% higher within the past month. Williams-Sonoma is currently a Zacks Rank #2 (Buy).

Looking at valuation, Williams-Sonoma is presently trading at a Forward P/E ratio of 20.7. Its industry sports an average Forward P/E of 19.72, so one might conclude that Williams-Sonoma is trading at a premium comparatively.

We can also see that WSM currently has a PEG ratio of 2.82. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Retail - Home Furnishings stocks are, on average, holding a PEG ratio of 1.7 based on yesterday's closing prices.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 198, positioning it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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.

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Williams-Sonoma, Inc. (WSM): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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