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Williams-Sonoma (WSM) Exceeds Market Returns: Some Facts to Consider

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Williams-Sonoma (WSM - Free Report) closed the most recent trading day at $199.43, moving +1.68% from the previous trading session. The stock's change was more than the S&P 500's daily gain of 0.01%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq lost 0.28%.

The seller of cookware and home furnishings's stock has dropped by 3.34% in the past month, falling short of the Retail-Wholesale sector's gain of 1.34% and the S&P 500's gain of 4.83%.

Analysts and investors alike will be keeping a close eye on the performance of Williams-Sonoma in its upcoming earnings disclosure. In that report, analysts expect Williams-Sonoma to post earnings of $1.87 per share. This would mark a year-over-year decline of 4.59%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.85 billion, indicating a 2.84% increase compared to the same quarter of the previous year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.55 per share and a revenue of $7.82 billion, signifying shifts of -2.73% and +1.38%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for Williams-Sonoma. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.29% rise in the Zacks Consensus EPS estimate. At present, Williams-Sonoma boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Williams-Sonoma is currently exchanging hands at a Forward P/E ratio of 22.93. Its industry sports an average Forward P/E of 22.93, so one might conclude that Williams-Sonoma is trading at no noticeable deviation comparatively.

One should further note that WSM currently holds a PEG ratio of 3.16. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Home Furnishings industry stood at 2.73 at the close of the market yesterday.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 168, which puts it in the bottom 32% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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.


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