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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Williams-Sonoma, Inc. (XNYS:WSM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WSM
Name:
WILLIAMS-SONOMA, INC. (XNYS:WSM)
Sector:
196.52M
Industry:
Specialty Retail
CEO:
Ms. Laura Alber
Total Employees:
12,200
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -142.70% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WILLIAMS-SONOMA, INC.(WSM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
145.84
One Month Price Target:
$147.13
Six Month Price Target :
$153.58
Likely Price in One Year's Time:
Ticker:
$161.32
Likely Trading Range Today Under (Normal Volatility)
$145.22
Price Upper limit ($) :
$146.95
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$135.59
This week:
$122.92
This month :
$100.01
Other Primary facts
Market Cap:
9.41B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
66.71M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.79%
-21.66%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$193.34
$171.20
$98.34
$120.48
Medium risk (<10%) entry points
Buy Call
Sell Call
$163.99
Buy Put:
Sell Put:
$159.26
$127.63
$132.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WSM
Sharpe Ratio:
4.54%
Comparison:
WSM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 58.56% higher than the industry
& ratio is 98.98% higher than the market/S&P 500 average
Average Returns/Yield of
WSM
Daily returns:
0.17%
Weekly returns:
0.84%
Monthly returns:
3.35%
Yearly returns:
34.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is 15.28% above industry average
Classification:
WSM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.53
Statistical test of Returns:
WSM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.50%
Weekly Volatility:
7.83%
Monthly Volatility:
15.67%
Yearly Volatility:
54.28%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.37%
Volatility in last five trading days has been -61.04% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.03%
Weekly VaR:
-15.71%
Monthly VaR:
-31.43%
How Much Can the price of
WSM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$108.12
This translates to price declining to:
$21.88
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WSM is a 121.82% riskier investment compared to the market/S&P 500 & is 90.03% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.65% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WSM
Beta in relation to market/S&P 500--1.58
Expected beta in 1 year's time:
0.847
Expected beta in 3 year's time:
1.198
Unlevered (debt free) Beta:
1.033
Beta in relation to Nasdaq (XNAS):
1.091
Beta in relation to all global stocks::
0.968
Beta Comparison & Analysis
Beta of competitors/peers::
1.489
Beta is 6.12% higher than peers
Average Industry Beta:
1.43
Beta is 10.49% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
54.46%
Sustainable growth rate is 64.02% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.263
Alpha is 19.60% above industry average alpha yield
Alpha is 1673% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WSM
Equity cost of capital:
0.140
Equity cost of capital is 7.94% above industry mean WACC
Unlevered (without debt) cost of capital:
9.13%
Before-tax cost of debt:
0.01%
After-tax cost of debt:
0.00%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.00%
WACC is 36.82% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$125.74
Revenue growth rate per share of (3Y):
6.72
Annual revenue growth rate is 31.78% above the industry average
EPS:
$15.41
Expected Annual growth rate of EPS (3Y):
53.23%
Expected future EPS growth rate is 51.14% higher than the Specialty Retail industry
Free cash flow (FCF) per share:
$14.73
Balance sheet equity growth per share: 26.54%
Equity growth rate per share is -48.25% lower than the industry
Debt per share
$14.98
EBITDA per share
$25.48
Valuation Analysis Today of
WSM
P/E Ratio:
9.08
P/E Ratio of Competitors/Peers:
14.99
P/E ratio is -39.43% lower than main peers & is -57.78% lower than the industry
Stock price/value with industry average P/E ratio: $331.47
WSM is -56.00% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $50.74
Present value of the expected future dividends only: $33.42
P/S (Price to Sales ratio):
1.16
Price to sales ratio is -71.49% below the industry mean
P/B (Price to book value ratio):
6.72
Price to free cash flow: 9.90
Price to free cash flow ratio is -62.92% lower than the industry
Net income growth rate (3Y):
184.22%
Net income growth rate is -138.92% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.95%
Dividend yeild: 1.91%
Previous Dividend: $0.78
Previous adjusted dividend: $0.78
Previous Dividend: $2.79
Expected next dividend best case: $0.87
Expected next dividend worst case: $0.69
Average dividend payment (long-term): $0.58
Average dividend increase/decrease (growth rate) % per period: 5.19%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 21/07/2022
Expected next dividend declaration date: 14/06/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 22/04/2022
Previous dividend declaration date: 16/03/2022
Dividend History:
2022-04-21--$0.78
2021-10-21--$0.71
2021-04-22--$0.59
2022-01-20--$0.71
2021-07-22--$0.59
2021-01-21--$0.53
Dividend growth rate is -2422.66% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
69.05%
Net debt to equity ratio:
39.27%
Debt to assets ratio:
24.31%
Net debt to assets ratio:
13.83%
Debt-to-asset ratio is -66.40% below industry average
Ability to repay debt:
Interest coverage ratio:
22974.05
Interest coverage ratio is 92663.97% more than industry average
Looking forward:
Debt growth rate:
411.70%
Annual debt growth is 487% higher than industry average debt growth rate
Debt repayment rate in last quarter: 23.09%
Analysis of Key Statistics
Correlation of price movement with the market:
0.567
Statistical significance of correlation:
WSM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.475
Stock price is 19.33% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.475
Correlation of price movement with Nasdaq (^IXIC):
-0.023
Covariance of price movement with the market:
-0.047
Kurtosis
10.039
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.467
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WSM
Gross Profit Margin Ratio:
177%
Operating Profit Margin Ratio:
17.90%
Operating profit margin is 175.32% higher than the industry
Net Profit Margin Ratio:
177%
Effective Tax Rate:
23.24%
Effective tax rate is 3.04% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
79.64%
Return on equity (ROE) is 5498.54% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
28.04%
Return on assets (ROA) is 201.41% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.28
Current ratio is -32.04% below industry average
Cash Conversion Cycle (days):
-19.6
Cash conversion cycle is -130.34% below industry average
The remaining useful life of property plant & equipment is: 2.7 years
Stock based compensation to net income ratio:
2.28%
In-depth Efficiency Analysis
Revenue generated per employee:
687.6K
Each employee generates -7% less revenue than industry average revenue per employee
EBITDA generated per employee:
139.4K
Each employee generates -42% less EBITDA than industry average revenue per employee
Profit generated per employee:
94.5K
Each employee generates -36% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
16.1K
Each employee generates -61% less free cash flow than industry average revenue per employee
Assets/Capital per employee
177.2K
Each employee generates -61% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WSM
SERVICE CORPORATION INTERNATIONAL (XNYS:SCI)
FARFETCH LIMITED (XNYS:FTCH)
LEAR CORPORATION (XNYS:LEA)
GAMESTOP CORP. (XNYS:GME)
RH (XNYS:RH)
BORGWARNER INC. (XNYS:BWA)
On Holding Ltd (XNYS:ONON)
MOHAWK INDUSTRIES, INC. (XNYS:MHK)
-
Current Analyst Ratings
Strong buy�8%
Buy�17%
Hold�71%
Sell�13%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/1/22
Revenue:
8.39B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.68B
3.71B
-
-
2.21B
-
-
2.21B
-
74.00K
198.42M
1.70B
1.50B
1.15B
1.50B
348.94M
1.15B
Statement of Cash Flow
Date:
Period:
47.92M
Differed Income Tax :
6.17M
Stock Based Compensation :
26.33M
Change in Working Capital :
- 121157.00K
Accounts Receivables:
1.52M
Other Working Capital:
16.17M
Other Non-Cash Items:
51.82M
Net Cash Provided by Operating Activities:
238.88M
Investments in PP&E:
- 42360.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
639.67M
-
639.67M
142.46M
1.09B
79.34M
1.95B
1.93B
85.44M
-
-
57.50M
88.18M
2.16B
-
4.11B
574.88M
208.74M
93.28M
389.64M
346.02M
1.52B
999.29M
144.38M
1.14B
-
2.66B
753.00K
894.88M
- 3929.0K
555.59M
April 30, 2021 at 6:00:00 AM
6.89B
1.45B
4.11B
-
1.21B
568.4M
-
93.00K
- 42267.00K
- 300000.00K
-
- 315529.00K
- 45576.00K
- 98451.00K
- 759556.00K
2.28M
- 560667.00K
639.67M
1.20B
238.88M
- 42360.00K
196.52M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WSM
2023
2024
2025
2026
2027
$162.13
$268.73
$297.26
$328.82
$363.73