InvestorsObserver gives Williams-Sonoma, Inc. (WSM) a strong review score of 76 from its analysis. The proprietary rating system considers the underlying health of a company by analyzing its stock price, earnings and growth rate. WSM currently holds a better value than 76% of the stock based on these metrics. Long-term buy-and-hold investors should find the valuation ranking system most relevant when making investment decisions.

Metrics analysis

WSM has a 12-month price-to-earnings (PE) ratio of 8.3. The historical average of around 15 indicates good value for WSM stock as investors pay lower prices relative to company earnings. WSM’s low trailing PE ratio shows that the company has been trading below fair market value recently. Its trailing 12-month earnings per share (EPS) of 15.35 more than justifies the current share price. However, rolling PE ratios do not take into account the company’s projected growth rate, resulting in many new companies having high PE ratios due to high growth potential that attracts investors despite insufficient earnings. . WSM’s 12-month PE-to-Growth (PEG) ratio of 1.4 is considered a poor value as the market overvalues ​​WSM relative to the company’s expected earnings growth. WSM’s PEG comes from the fact that its forward price/earnings ratio is divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and stock price. Due to their incorporation of more fundamentals of a company’s overall health and their focus on the future rather than the past, PEG ratios are one of the most widely used valuation measures by analysts today. today.

Summary

WSM’ has a low valuation at its current price due to an overvalued PEG ratio due to strong growth. WSM’s PE and PEG are below the market average, resulting in a below-average valuation score. Click here for the full Williams-Sonoma, Inc. (WSM) stock report.

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