April 11, 2024
Top 10 Stock Williams-Sonoma Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Williams-Sonoma – Top 10 Stock in Diversity Leaders in United States
Williams-Sonoma is listed as a top 10 stock on April 11, 2024 in the market index Diversity USA because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 47 (47% performer), Obermatt assesses an overall hold recommendation for Williams-Sonoma on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Homefurnishing Retail |
| Index | Dividends USA, Diversity USA, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Williams-Sonoma Hold
| 360 METRICS | April 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 34 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 73 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 96 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 94 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 47 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 47 (better than 47% compared with alternatives), overall professional sentiment and financial characteristics for the stock Williams-Sonoma are below the industry average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Williams-Sonoma. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 73% of competitors in the same industry. The consolidated Safety Rank at 96 means that the company has a financing structure that is safer than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 34, meaning that the share price of Williams-Sonoma is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 66% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 47, Williams-Sonoma is worse than 53% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 73), a safe financing structure (Safety Rank of 96), and positive professional market sentiment (Sentiment Rank of 94), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Williams-Sonoma compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (73% better than peers). The value rank could be the reverse reflection of that (27%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Williams-Sonoma very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Williams-Sonoma is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Williams-Sonoma. Analyst Opinions are at a rank of 25 (worse than 75% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 100, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Williams-Sonoma. Even better, the Professional Investors rank is 96, meaning that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 76, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 76% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Williams-Sonoma has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Williams-Sonoma Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Williams-Sonoma shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Williams-Sonoma. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 71% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning Williams-Sonoma's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 13 is also low. Compared with invested capital, the stock price is higher than for 87% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 34, is a hold recommendation based on Williams-Sonoma's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Williams-Sonoma? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Williams-Sonoma only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Williams-Sonoma Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Williams-Sonoma shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Williams-Sonoma. Capital Growth has a rank of 83, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 99 (above 99% of alternative investments). But Sales Growth has only a rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors, and Profit Growth is also low at a rank of 48. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Williams-Sonoma, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Williams-Sonoma Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 100 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 30 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2022, the company Williams-Sonoma has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Williams-Sonoma is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Williams-Sonoma. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 30, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Williams-Sonoma has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Williams-Sonoma. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Williams-Sonoma Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 34 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 73 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 95 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 85 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Williams-Sonoma (Homefurnishing Retail, USA) shares have much better financial characteristics than comparable stocks. Shares of Williams-Sonoma are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 96, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Williams-Sonoma's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Williams-Sonoma exhibits low value (Obermatt Value Rank of 34), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 96) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.