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Williams-Sonoma (WSM) Stock Drops Despite Market Gains: Important Facts to Note

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Williams-Sonoma (WSM - Free Report) closed the latest trading day at $213.65, indicating a -1.86% change from the previous session's end. This change lagged the S&P 500's daily gain of 0.24%. On the other hand, the Dow registered a gain of 0.16%, and the technology-centric Nasdaq increased by 0.08%.

Coming into today, shares of the seller of cookware and home furnishings had gained 3.76% in the past month. In that same time, the Retail-Wholesale sector gained 5.98%, while the S&P 500 gained 2.37%.

The upcoming earnings release of Williams-Sonoma will be of great interest to investors. The company is forecasted to report an EPS of $2.89, showcasing a 6.25% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $2.32 billion, up 1.97% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Williams-Sonoma. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Williams-Sonoma presently features a Zacks Rank of #3 (Hold).

Looking at its valuation, Williams-Sonoma is holding a Forward P/E ratio of 25.61. This valuation marks a premium compared to its industry's average Forward P/E of 20.08.

One should further note that WSM currently holds a PEG ratio of 3.01. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Retail - Home Furnishings industry stood at 2.03 at the close of the market yesterday.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 141, putting it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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