Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $21.16B
• Dividend Yield: 1.47%
• Average Volume (3M): 1.11M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 1.46
• 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: 121,790,340
• 10 Day Avg. Volume: 1,530,855
• 30 Day Avg. Volume: 1,109,432
• 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: 1.16
• Enterprise Value/Revenue: 3.13
• Enterprise Value/Gross Profit: 6.85
• Enterprise Value/Ebitda: 14.66
• 1Y Price Target: $205.56
• Price Target Upside: 18.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): 8.7
• Revenue Forecast (FY): $7.87B

• Rating: 73 Outperform
• Price Target: $202.00 ▲(16.27% Upside)

Williams-Sonoma's overall stock score is driven by its strong financial performance and positive earnings call sentiment, which highlight robust profitability and effective management. However, technical analysis indicates bearish momentum, which tempers the overall score. The valuation is fair, providing a balanced view of the company's stock potential.

Positive Factors

Omnichannel Strategy

Williams-Sonoma's omnichannel approach enhances customer reach and flexibility, supporting sustained revenue growth by integrating retail, e-commerce, and catalog sales.

AI Integration

AI integration improves operational efficiency and customer service, driving cost savings and productivity gains, which are crucial for long-term competitiveness.

Financial Flexibility

Enhanced financial flexibility through credit agreement amendments supports growth objectives and provides a buffer against economic uncertainties.

Negative Factors

Tariff Challenges

Rising tariffs increase costs, pressuring margins and potentially impacting pricing strategy, which could affect competitiveness and profitability.

Macroeconomic Uncertainty

Economic uncertainties, including housing market weakness and high interest rates, may dampen consumer spending, affecting sales and growth prospects.

Flat Operating Margin Guidance

Unchanged operating margin guidance amid rising tariffs suggests limited ability to pass costs to consumers, potentially squeezing profitability.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-Sonoma, Inc. (WSM) is a leading specialty retailer of high-quality products for the kitchen and home. Founded in 1956, the company operates several brands, including Williams Sonoma, Pottery Barn, West Elm, and Rejuvenation, catering to diverse customer needs across various lifestyle segments. The company offers a wide range of products, including cookware, furniture, home decor, and outdoor items, focusing on design, quality, and sustainability.

How the Company Makes Money

Williams-Sonoma generates revenue primarily through the sale of its products across multiple channels, including retail stores, e-commerce platforms, and catalog sales. The company operates a robust omnichannel strategy, allowing it to reach customers both online and offline. Key revenue streams include direct-to-consumer sales, which account for a significant portion of total revenue, as well as wholesale sales to third-party retailers. Additionally, Williams-Sonoma benefits from strategic partnerships with designers and influencers, enhancing brand visibility and driving sales. The company's loyalty programs and subscription services also contribute to customer retention and repeat purchases, further bolstering its financial performance.

Williams-Sonoma Financial Statement Overview

Summary

Williams-Sonoma exhibits strong financial health with robust profitability, efficient cash flow management, and a stable balance sheet. The company has effectively managed its operations and finances, positioning itself well within the specialty retail industry. While leverage is moderate, the high return on equity and consistent cash flow generation underscore its financial strength.

Income Statement

Williams-Sonoma demonstrates strong profitability with a consistent gross profit margin around 45% and a net profit margin exceeding 14% in the TTM. The company has shown resilience with a positive revenue growth rate in the latest TTM, recovering from a slight decline in the previous annual period. EBIT and EBITDA margins are robust, indicating effective cost management and operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio under 0.65, suggesting moderate leverage. Return on equity is impressive at over 53% in the TTM, indicating strong profitability relative to shareholder equity. The equity ratio is healthy, showing a balanced asset structure.

Cash Flow

Cash flow analysis reveals strong free cash flow growth in the TTM, with a free cash flow to net income ratio close to 0.80, indicating efficient cash generation relative to earnings. Operating cash flow to net income ratio is also solid, reflecting good cash conversion from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.83B	7.71B	7.75B	8.67B	8.25B	6.78B
Gross Profit	3.58B	3.58B	3.30B	3.68B	3.63B	2.64B
EBITDA	1.67B	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	5.23B	5.30B	5.27B	4.66B	4.63B	4.66B
Cash, Cash Equivalents and Short-Term Investments	985.82M	1.21B	1.26B	367.34M	850.34M	1.20B
Total Debt	1.39B	1.35B	1.39B	1.44B	1.28B	1.53B
Total Liabilities	3.08B	3.16B	3.15B	2.96B	2.96B	3.01B
Stockholders Equity	2.15B	2.14B	2.13B	1.70B	1.66B	1.65B
Cash Flow
Free Cash Flow	1.03B	1.14B	1.49B	698.71M	1.14B	1.11B
Operating Cash Flow	1.29B	1.36B	1.68B	1.05B	1.37B	1.27B
Investing Cash Flow	-261.74M	-221.21M	-188.26M	-353.95M	-226.25M	-168.88M
Financing Cash Flow	-1.31B	-1.18B	-598.31M	-1.18B	-1.49B	-343.02M

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 173.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Negative. The current price of 173.73 is below the 20-day moving average (MA) of 188.49, below the 50-day MA of 191.06, and below the 200-day MA of 178.09, indicating a bearish trend. The MACD of -4.69 indicates Positive momentum. The RSI at 35.54 is Neutral, neither overbought nor oversold. The STOCH value of 18.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	73 Outperform	$21.16B	19.10	56.92%	1.47%	5.10%	7.59%
BBY	67 Neutral	$15.89B	20.84	26.72%	5.01%	-2.21%	-37.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BBWI	57 Neutral	$3.19B	4.78	―	5.14%	-1.04%	-20.88%
W	57 Neutral	$13.69B	―	―	―	3.35%	42.99%
ETSY	55 Neutral	$5.24B	37.12	―	―	1.98%	-20.98%
RH	47 Neutral	$2.80B	27.80	―	―	9.56%	205.41%

Williams-Sonoma Corporate Events

Williams-Sonoma’s Earnings Call: Growth Amid Challenges

The recent earnings call of Williams-Sonoma painted a picture of robust sales growth and profitability, buoyed by positive comparable sales across all brands, effective cost management, and strategic innovations like AI integration. Despite these achievements, the company faces significant challenges due to increased tariffs and macroeconomic uncertainties, which are impacting their ability to improve operating margins.

Williams-Sonoma Reports Strong Q2 2025 Performance

Williams-Sonoma, Inc. is a leading digital-first, design-led, and sustainable home retailer, known for its diverse portfolio of brands including Pottery Barn, West Elm, and Williams Sonoma, operating across various international markets.