Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $24.43B
• Dividend Yield: 1.37%
• Average Volume (3M): 876.80K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 1.39
• Revenue Growth: 5.10%
• EPS Growth: 7.59%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 1.96
• Shares Outstanding: 119,380,714
• 10 Day Avg. Volume: 802,603
• 30 Day Avg. Volume: 876,796
• PEG Ratio: 1.12
• Price to Book (P/B): 12.45
• Price to Sales (P/S): 3.46
• P/FCF Ratio: 23.43
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 6.93
• Enterprise Value/Ebitda: 15.40
• 1Y Price Target: $206.58
• Price Target Upside: 0.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 9.15
• Revenue Forecast (FY): $8.14B

• Rating: 75 Outperform
• Price Target: $230.00 ▲(12.39% Upside)

Williams-Sonoma's overall stock score is driven by its strong financial performance and positive earnings call sentiment. The company's robust profitability, effective cash management, and strategic AI initiatives are significant strengths. However, technical analysis indicates potential bearish momentum, and tariff challenges pose risks. The valuation is fair, supporting a balanced investment outlook.

Positive Factors

High Profitability Margins

Sustained gross margins near 45% and net margins around 14% indicate durable pricing power from premium brands and product mix. High margins provide a structural cushion against cost shocks, support reinvestment in omnichannel capabilities, and underpin steady operating cash flow.

Strong Cash Generation

Consistent FCF growth and a high FCF-to-net income ratio show effective cash conversion, enabling capital allocation for stores, e-commerce, tech, and shareholder returns. Robust cash generation improves resilience to economic cycles and funds strategic investments without relying heavily on new debt.

AI & Retail Execution Gains

Meaningful AI adoption reducing human handling and launch of Olive are structural operational upgrades that can lower service costs, increase conversion, and enhance personalization. Coupled with strong retail comps, AI-driven efficiency supports scalable omnichannel growth and customer retention.

Negative Factors

Tariff-Related Cost Pressure

A materially higher incremental tariff rate and recent new tariffs create sustained input-cost risk for furniture-heavy assortments. Unless sourcing or pricing shifts occur, tariffs can structurally compress margins and force price increases that may weaken demand for discretionary home goods.

Rising SG&A Base

An elevated SG&A run-rate driven by incentives and advertising increases fixed operating leverage. If top-line growth proves modest, higher recurring SG&A pressures margins and cash flow. Management must sustain productivity gains to offset this structural cost creep.

Modest Top-Line Growth

Sub-2% TTM revenue growth implies limited organic expansion and greater reliance on margin expansion and share gains for earnings growth. In a cyclical discretionary category, slow revenue momentum increases vulnerability to macro shocks and constrains long-term scalability.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; and women's and men's accessories, travel, entertaining and bar, home décor, and seasonal items under the Mark and Graham brand, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. It operates 544 stores comprising 502 stores in 41states, Washington, D.C., and Puerto Rico; 20 stores in Canada; 19 stores in Australia; 3 stores in the United Kingdom; and 139 franchised stores, as well as e-commerce websites in various countries in the Middle East, the Philippines, Mexico, South Korea, and India. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.

How the Company Makes Money

Williams-Sonoma generates revenue primarily through the sale of its products across various channels, including retail stores, e-commerce platforms, and catalog sales. The company has a robust online presence, which contributes significantly to its sales, especially in recent years as consumer preferences have shifted towards online shopping. Key revenue streams include direct sales from its branded websites and physical stores, as well as wholesale distribution to third-party retailers. Additionally, the company benefits from substantial customer loyalty programs and membership initiatives that encourage repeat purchases. Strategic partnerships with designers and influencers, as well as collaborations with other brands, enhance its product offerings and market reach, further contributing to its earnings.

Williams-Sonoma Financial Statement Overview

Summary

Williams-Sonoma exhibits strong financial health with robust profitability and revenue growth. The balance sheet shows moderate leverage with high returns on equity, while cash flow statements confirm effective cash generation and management. Overall, the company is well-positioned in the specialty retail industry with a solid financial foundation.

Income Statement

Williams-Sonoma demonstrates strong profitability with a consistent gross profit margin around 45% and a net profit margin of approximately 14% in TTM. The company has shown resilience with a positive revenue growth rate of 1.05% in TTM, recovering from a slight decline in the previous year. EBIT and EBITDA margins are robust, indicating efficient operations.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.71 in TTM, indicating moderate leverage. Return on equity is impressive at 51.88%, showcasing effective use of equity to generate profits. The equity ratio remains healthy, suggesting a solid asset base.

Cash Flow

Cash flow analysis reveals strong free cash flow growth of 7.71% in TTM, indicating effective cash management. The operating cash flow to net income ratio is 0.82, reflecting good cash conversion. The free cash flow to net income ratio of 0.90 further underscores the company's ability to generate cash relative to its earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.91B	7.71B	7.75B	8.67B	8.25B	6.78B
Gross Profit	3.61B	3.58B	3.30B	3.68B	3.63B	2.64B
EBITDA	1.62B	1.66B	1.48B	1.71B	1.65B	1.10B
Net Income	1.11B	1.13B	949.76M	1.13B	1.13B	680.71M
Balance Sheet
Total Assets	5.31B	5.30B	5.27B	4.66B	4.63B	4.66B
Cash, Cash Equivalents and Short-Term Investments	884.66M	1.21B	1.26B	367.34M	850.34M	1.20B
Total Debt	1.47B	1.35B	1.39B	1.44B	1.28B	1.53B
Total Liabilities	3.24B	3.16B	3.15B	2.96B	2.96B	3.01B
Stockholders Equity	2.07B	2.14B	2.13B	1.70B	1.66B	1.65B
Cash Flow
Free Cash Flow	1.11B	1.14B	1.49B	698.71M	1.14B	1.11B
Operating Cash Flow	1.35B	1.36B	1.68B	1.05B	1.37B	1.27B
Investing Cash Flow	-246.89M	-221.21M	-188.26M	-353.95M	-226.25M	-168.88M
Financing Cash Flow	-1.05B	-1.18B	-598.31M	-1.18B	-1.49B	-343.02M

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 204.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Positive. The current price of 204.65 is above the 20-day moving average (MA) of 203.32, above the 50-day MA of 190.59, and above the 200-day MA of 181.56, indicating a bullish trend. The MACD of 4.54 indicates Positive momentum. The RSI at 55.00 is Neutral, neither overbought nor oversold. The STOCH value of 22.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	75 Outperform	$24.43B	22.50	56.92%	1.37%	5.10%	7.59%
BBY	62 Neutral	$13.64B	21.49	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
W	58 Neutral	$13.49B	-40.44	―	―	3.35%	42.99%
ETSY	57 Neutral	$5.23B	37.02	―	―	1.98%	-20.98%
BBWI	53 Neutral	$4.46B	6.70	―	4.16%	-1.04%	-20.88%
RH	52 Neutral	$3.73B	35.84	―	―	9.74%	55.13%