Williams-Sonoma (WSM) Dips More Than Broader Markets: What You Should Know

Williams-Sonoma (WSM) closed at $124.07 in the latest trading session, marking a -1.62% move from the prior day. This change lagged the S&P 500's daily loss of 0.4%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 0.18%.

Heading into today, shares of the seller of cookware and home furnishings had lost 15.35% over the past month, lagging the Retail-Wholesale sector's loss of 15.28% and the S&P 500's loss of 9.39% in that time.

Investors will be hoping for strength from Williams-Sonoma as it approaches its next earnings release. On that day, Williams-Sonoma is projected to report earnings of $2.97 per share, which would represent year-over-year growth of 1.37%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.83 billion, up 4.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $15.75 per share and revenue of $8.66 billion. These totals would mark changes of +6.06% and +5.05%, respectively, from last year.

Any recent changes to analyst estimates for Williams-Sonoma should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 remained stagnant. Williams-Sonoma is currently sporting a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Williams-Sonoma is currently trading at a Forward P/E ratio of 8.01. For comparison, its industry has an average Forward P/E of 9.2, which means Williams-Sonoma is trading at a discount to the group.

Also, we should mention that WSM has a PEG ratio of 1.4. 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 Retail - Home Furnishings was holding an average PEG ratio of 0.98 at yesterday's closing price.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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