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Williams-Sonoma (WSM) Stock Sinks As Market Gains: Here's Why

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Williams-Sonoma (WSM - Free Report) closed the latest trading day at $132.50, indicating a -1.68% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 0.27%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.26%.

Shares of the seller of cookware and home furnishings have depreciated by 12.69% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 0.61% and the S&P 500's gain of 2%.

Market participants will be closely following the financial results of Williams-Sonoma in its upcoming release. In that report, analysts expect Williams-Sonoma to post earnings of $1.76 per share. This would mark a year-over-year decline of 3.83%. Our most recent consensus estimate is calling for quarterly revenue of $1.78 billion, down 3.86% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $7.99 per share and a revenue of $7.54 billion, representing changes of +7.54% and -2.7%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Williams-Sonoma. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.34% decrease. At present, Williams-Sonoma boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Williams-Sonoma currently has a Forward P/E ratio of 16.88. For comparison, its industry has an average Forward P/E of 17.87, which means Williams-Sonoma is trading at a discount to the group.

Investors should also note that WSM has a PEG ratio of 2.65 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Retail - Home Furnishings stocks are, on average, holding a PEG ratio of 2.04 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 204, finds itself in the bottom 20% echelons 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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