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Should You Buy Williams-Sonoma, Inc. (WSM) Stock Friday?

Friday, September 30, 2022 12:21 PM | InvestorsObserver Analysts
Should You Buy Williams-Sonoma, Inc. (WSM) Stock Friday?

Williams-Sonoma, Inc. (WSM) receives a strong valuation score of 78 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. WSM holds a better value than 78% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

Valuation Rank - 78
WSM gets a 78 Valuation Rank today. Find out what this means to you and get the rest of the rankings on WSM!

Metrics Analysis

WSM has a trailing twelve month Price to Earnings (PE) ratio of 8 which places it below the histroical average of roughly 15. WSM is currently trading at a good value due to investors paying less than what the stock is worth in relation to its earnings. WSM's trailing-12-month earnings per share (EPS) of 16.01 does justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
WSM currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.35. The market is currently overvaluing WSM in relation to its projected growth due to the PEG ratio being above the fair market value of 1. WSM's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for WSM at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for WSM are worse than the average of the market resulting in a valuation score of 78. Click Here to get the full Report on Williams-Sonoma, Inc. (WSM) stock.

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