Williams-Sonoma, Inc. Fundamental Analysis
Williams-Sonoma, Inc. (WSM) shows moderate financial fundamentals with a PE ratio of 22.63, profit margin of 13.81%, and ROE of 53.29%. The company generates $7.8B in annual revenue with weak year-over-year growth of 1.24%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WSM's fundamental strength across five key dimensions:
Efficiency Score
ExcellentWSM demonstrates superior asset utilization.
Valuation Score
ModerateWSM shows balanced valuation metrics.
Growth Score
WeakWSM faces weak or negative growth trends.
Financial Health Score
ExcellentWSM maintains a strong and stable balance sheet.
Profitability Score
ModerateWSM maintains healthy but balanced margins.
Key Financial Metrics
Is WSM Expensive or Cheap?
P/E Ratio
WSM trades at 22.63 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, WSM's PEG of 13.44 indicates potential overvaluation.
Price to Book
The market values Williams-Sonoma, Inc. at 13.17 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.85 times EBITDA. This signals the market has high growth expectations.
How Well Does WSM Make Money?
Net Profit Margin
For every $100 in sales, Williams-Sonoma, Inc. keeps $13.81 as profit after all expenses.
Operating Margin
Core operations generate 17.97 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $53.29 in profit for every $100 of shareholder equity.
ROA
Williams-Sonoma, Inc. generates $21.51 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Williams-Sonoma, Inc. produces operating cash flow of $1.35B, showing steady but balanced cash generation.
Free Cash Flow
Williams-Sonoma, Inc. generates strong free cash flow of $1.09B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.26 in free cash annually.
FCF Yield
WSM converts 4.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.63
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
13.44
vs 25 benchmark
P/B Ratio
Price to book value ratio
13.17
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.11
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.80
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.34
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.53
vs 25 benchmark
ROA
Return on assets percentage
0.22
vs 25 benchmark
ROCE
Return on capital employed
0.43
vs 25 benchmark
How WSM Stacks Against Its Sector Peers
| Metric | WSM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.63 | 24.20 | Neutral |
| ROE | 53.29% | 1170.00% | Weak |
| Net Margin | 13.81% | 2530.00% | Weak |
| Debt/Equity | 0.80 | 0.72 | Neutral |
| Current Ratio | 1.34 | 2.82 | Neutral |
| ROA | 21.51% | -8380.00% (disorted) | Strong |
WSM outperforms its industry in 1 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Williams-Sonoma, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
46.43%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
103.44%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
31.23%
Industry Style: Cyclical, Growth, Discretionary
High Growth