Is It Time To Consider Buying Williams-Sonoma, Inc. (NYSE:WSM)?

Williams-Sonoma, Inc. (NYSE:WSM) saw a decent share price growth in the teens level on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Williams-Sonoma’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Williams-Sonoma

What's the opportunity in Williams-Sonoma?

Good news, investors! Williams-Sonoma is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $240.30, but it is currently trading at US$173 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Williams-Sonoma’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Williams-Sonoma look like?

earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 6.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Williams-Sonoma, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since WSM is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on WSM for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WSM. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Williams-Sonoma at this point in time. You'd be interested to know, that we found 1 warning sign for Williams-Sonoma and you'll want to know about this.

If you are no longer interested in Williams-Sonoma, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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