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

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In the latest trading session, Williams-Sonoma (WSM - Free Report) closed at $182.62, marking a +1.36% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.44% for the day. Elsewhere, the Dow saw an upswing of 0.36%, while the tech-heavy Nasdaq appreciated by 0.54%.

The stock of seller of cookware and home furnishings has fallen by 3.4% in the past month, lagging the Retail-Wholesale sector's loss of 2.57% and the S&P 500's loss of 3.31%.

The investment community will be paying close attention to the earnings performance of Williams-Sonoma in its upcoming release. The company's earnings per share (EPS) are projected to be $1.79, reflecting a 3.24% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $1.8 billion, up 4.3% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $9.19 per share and a revenue of $8.14 billion, signifying shifts of +3.96% and +4.33%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Williams-Sonoma. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.95% upward. Right now, Williams-Sonoma possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Williams-Sonoma is presently trading at a Forward P/E ratio of 19.61. This indicates a premium in contrast to its industry's Forward P/E of 18.26.

One should further note that WSM currently holds a PEG ratio of 2.28. 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 1.36 based on yesterday's closing prices.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 160, finds itself in the bottom 35% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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