At US$204, Is Williams-Sonoma, Inc. (NYSE:WSM) Worth Looking At Closely?

Williams-Sonoma, Inc. (NYSE:WSM) received a lot of attention from a substantial price increase on the NYSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Williams-Sonoma’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

What's The Opportunity In Williams-Sonoma?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.16% above our intrinsic value, which means if you buy Williams-Sonoma today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $191.96, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Williams-Sonoma’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

See our latest analysis for Williams-Sonoma

Can we expect growth from Williams-Sonoma?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 6.1% 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? It seems like the market has already priced in WSM’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on WSM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.