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What this page is: Delvantic's full research page for Williams-Sonoma, Inc. (WSM) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-07): Designation Low · Gem Score -20 (−100…+100 Quality+Value blend) · Quality 54 · Value -70 · Sentiment 19 (timing only, not weighted) · Composite fair value $96.46 vs $235.09 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
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Williams-Sonoma, Inc.
WSM NYSEWilliams-Sonoma, Inc. is a multi-channel specialty retailer focused on high-quality products for the home. The company serves customers through a portfolio of well-known brands, including Williams Sonoma, Pottery Barn, Pottery Barn Kids and Teen, West Elm, Rejuvenation, and Mark & Graham. Its product assortment spans cookware, kitchen tools, tabletop items, furniture, bedding, lighting, rugs, décor, and gifting, with a strong emphasis on design, functionality, and lifestyle-oriented home solutions. Williams-Sonoma, Inc. sells through physical stores, e-commerce sites, catalogs, and franchise operations, making it a significant name in the home furnishings and culinary retail markets. Headquartered in San Francisco, California, Williams-Sonoma, Inc. plays a central role in serving households, interior design needs, and everyday home living across multiple customer segments.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 8.84
Total Equity: $2.08B
Shares: 123,153,000
Total Debt: $0.00
Cash: $1.02B
EBITDA: $1.65B
Total Debt: $0.00
Cash: $1.02B
Revenue: $7.81B
Revenue: $7.81B
Revenue: $7.81B
Total Equity: $2.08B
Tax Rate: 25.1%
Equity: $2.08B
Total Debt: $0.00
Cash: $1.02B
Current Liabilities: $1.95B
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $2.08B
Shares: 123,153,000
Shares: 123,153,000
CapEx: -$259.44M
Shares: 123,153,000
Stock Price: $235.09
Net Income: $1.09B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 30, 2026 2:38am (38d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Revenue | $8.2B | $8.7B | $7.8B | $7.7B | $7.8B |
| Cost of Revenue | $4.6B | $5.0B | $4.4B | $4.1B | $4.2B |
| Gross Profit | $3.6B | $3.7B | $3.3B | $3.6B | $3.6B |
| Operating Expenses | $2.2B | $2.2B | $2.1B | $2.2B | $2.2B |
| Operating Income | $1.5B | $1.5B | $1.2B | $1.4B | $1.4B |
| Net Income | $1.1B | $1.1B | $949.8M | $1.1B | $1.1B |
| EBITDA | $1.6B | $1.7B | $1.5B | $1.7B | $1.6B |
| EPS | $15.17 | $16.58 | $7.35 | $8.91 | $8.96 |
| EPS (Diluted) | $14.75 | $16.32 | $7.28 | $8.79 | $8.84 |
Balance Sheet (Annual)
Last updated: Aug 30, 2026 2:30am (38d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Cash & Equivalents | $850.3M | $367.3M | $1.3B | $1.2B | $1.0B |
| Total Current Assets | $2.3B | $2.0B | $2.7B | $2.8B | $2.7B |
| Total Assets | $4.6B | $4.7B | $5.3B | $5.3B | $5.4B |
| Current Liabilities | $1.8B | $1.6B | $1.9B | $1.9B | $2.0B |
| Long-Term Debt | — | — | — | — | — |
| Total Liabilities | $3.0B | $3.0B | $3.1B | $3.2B | $3.3B |
| Total Equity | $1.7B | $1.7B | $2.1B | $2.1B | $2.1B |
| Retained Earnings | $1.1B | $1.1B | $1.6B | $1.6B | $1.5B |
Cash Flow (Annual)
Last updated: Aug 30, 2026 2:48am (38d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.4B | $1.1B | $1.7B | $1.4B | $1.3B |
| Capital Expenditure | -$226.5M | -$354.1M | -$188.5M | -$221.6M | -$259.4M |
| Free Cash Flow | $1.1B | $698.7M | $1.5B | $1.1B | $1.1B |
| Acquisitions (net) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | -$300.0M | $0 | $0 | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$899.4M | -$880.0M | -$313.0M | -$807.5M | -$854.0M |
| Net Change in Cash | -$350.0M | -$483.0M | $894.7M | -$49.0M | -$193.2M |
Growth Trends (YoY %)
Last updated: Aug 30, 2026 2:38am (38d ago)| Metric | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue Growth | +5.2% | -10.6% | -0.5% | +1.2% |
| Gross Profit Growth | +1.3% | -10.2% | +8.4% | +0.6% |
| Operating Income Growth | +3.1% | -17.0% | +14.9% | -1.0% |
| Net Income Growth | +0.1% | -15.8% | +18.5% | -3.3% |
| EBITDA Growth | +3.8% | -13.8% | +12.4% | -0.8% |
Dividend History (Last 20)
Last updated: Aug 30, 2026 2:30am (38d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-17 | $0.76 | — | — | — |
| 2026-04-17 | $0.76 | — | — | — |
| 2026-01-16 | $0.66 | — | — | — |
| 2025-10-17 | $0.66 | — | — | — |
| 2025-07-18 | $0.66 | — | — | — |
| 2025-04-17 | $0.66 | — | — | — |
| 2025-01-17 | $0.57 | — | — | — |
| 2024-10-18 | $0.57 | — | — | — |
| 2024-07-19 | $0.57 | — | — | — |
| 2024-04-18 | $1.13 | — | — | — |
| 2024-01-18 | $0.90 | — | — | — |
| 2023-10-19 | $0.90 | — | — | — |
| 2023-07-20 | $0.90 | — | — | — |
| 2023-04-20 | $0.90 | — | — | — |
| 2023-01-19 | $0.78 | — | — | — |
| 2022-10-20 | $0.78 | — | — | — |
| 2022-07-21 | $0.78 | — | — | — |
| 2022-04-21 | $0.78 | — | — | — |
| 2022-01-20 | $0.71 | — | — | — |
| 2021-10-21 | $0.71 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-10-05 02:01A +1σ run of quarters pays -63%; a −1σ run costs 78%. Ratio -0.8:1 (μ 1.9%, σ 5.7% , 16 pairs).
Older method (repeat-worst-quarter): -0.8 : 1
| Case | Growth | Margin | Fair value | vs price ($235.09) |
|---|---|---|---|---|
| Bull — recovery | +6% | 17.3% | $86.92 | -63% |
| Base — stabilizes | +4% | 15.0% | $72.59 | -69% |
| Bear — keeps slipping | +2% | 12.8% | $59.70 | -75% |
| Stress — last quarter repeats | -4% | 13.9% | $52.50 | -78% |
| Upside — a +1σ run of quarters (v2) | +8% | 16.2% | $86.85 | -63% |
| Stress — a −1σ run of quarters (v2) | -4% | 13.6% | $52.34 | -78% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-30 02:56The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Looking at the raw numbers first: WSM is doing $7.81B TTM revenue with net income of $1.09B for a 13.9% net margin, and Q2 FY26 (Aug print) came in at $1.96B revenue with a striking 17.3% net margin — up from 13.5% a year prior. That's not a decelerating business; that's margin expansion on flat-ish top line (revenue CAGR of 0.4% over five years is basically nil, but the company earned $1.13B in FY22 on $8.25B and now earns $1.09B on $7.81B — flat earnings on lower revenue equals real operational leverage). ROIC of ~100% and ROE of 52% with zero reported debt and $1.02B cash is a genuinely rare financial profile. FCF of $1.06B against a $27.7B market cap is a 3.8% FCF yield — not cheap, not expensive for this quality.
Where I part ways with the synthesis: the "$85 fair value / -63.8% overvalued" claim is doing violent work on a business that consistently prints ~100% ROIC. A DCF that spits out $85 for WSM is almost certainly using mid-cycle margin assumptions (~10-11% operating, versus 18.1% reported and 17%+ in the latest quarter) and modeling reversion to a pre-pandemic norm that has now held for four consecutive years. At some point four years of "unsustainable" margins becomes the actual run-rate. The Market Forces call of "deteriorating competitive position disguised by financial engineering" doesn't square with expanding gross margins (46.2%) and rising net margin sequentially — there's no financial engineering visible here; debt is zero, buybacks are funded by real FCF, and the cash flow statement ties. That call reads as narrative, not evidence.
The contrarian pushback on my own read: revenue really has gone nowhere for four years, and FCF CAGR of -15.9% is a real yellow flag — the $1.06B FCF is well below the peak. Insider activity is one-directional selling (33k+ shares sold in July-August against trivial awards), which at a 26.5x P/E on a discretionary retailer with flat revenue is exactly what you'd expect insiders to do if they thought the multiple was stretched. The bear case is legitimate: if housing turnover stays depressed and the consumer rolls over, a specialty home-furnishings retailer at 3.5x EV/Sales and 16.7x EV/EBITDA has meaningful downside — a re-rating to 12x EBITDA on trough earnings could easily produce a $160-170 stock. The Q4 seasonal comparison ($2.36B vs $2.46B prior year, -4% YoY on the most important quarter) is the single most concerning data point in the file and the synthesis models are underweighting it.
Net verdict: I dissent from the "-63.8% overvalued, fair value $85" magnitude but agree with the direction. A quality compounder with 100% ROIC, zero debt, and expanding margins does not trade at $85 — that's a distressed multiple applied to a fortress balance sheet. However, at 26.5x earnings with 1% revenue growth and clear cyclical exposure to housing/discretionary, $235 is pricing in either margin permanence or a growth reacceleration that hasn't shown up in the top line. My honest fair value range is $170-195 (roughly 18-20x earnings, 14-15x FCF), implying 15-25% downside — meaningful, but not the 64% the synthesis claims. The narrative layer's "fallen-angel/fragile" tag is the most accurate framing in the packet: the story can crack on one bad holiday quarter, and insiders are selling into strength. Wait for the Q4 (Feb-reporting) print or a pullback into the $180s before engaging; don't short a 100%-ROIC business without a catalyst.
GPT Reading
At $235, the market is paying a premium multiple for a business that has been excellent operationally but has not been growing in a way that supports that premium. The annual revenue line tells the key story: $8.67B in FY2023 fell to $7.75B in FY2024, then $7.71B in FY2025, and only recovered to $7.81B in FY2026. That is essentially a flat-to-down four-year revenue base, yet the stock trades at 26.6x earnings and 3.7x sales. What keeps the story alive is margin resilience: FY2026 gross margin was 46.2%, operating margin 18.1%, and net margin 13.9%, which are exceptional for retail. Even in the latest quarter, $1.96B of revenue produced $338.1M of net income, a 17.3% net margin. This is not a broken retailer. It is a very high-quality one. But quality alone does not justify any price, and the current price looks like it assumes these margins are both durable and worth a luxury multiple despite negligible top-line growth.
What stands out most is that Williams-Sonoma has managed to preserve earnings far better than revenue. Net income was $1.13B in FY2023, dropped to $949.8M in FY2024, then recovered to $1.13B in FY2025 and held at $1.09B in FY2026. That stability, plus $1.31B of operating cash flow and $1.06B of free cash flow in FY2026, explains why investors have rewarded it. The balance sheet also deserves real credit: no debt disclosed, $1.02B of cash, and a current ratio of 1.39. This is a fortress operator in a cyclical category. But the market cap is $27.7B against roughly $1.1B of earnings and $1.06B of FCF, so investors are buying a mature home-furnishings retailer at about 25-26x both earnings and free cash flow while revenue is growing around 1%. For that to work, margins need to stay near peak levels indefinitely or growth needs to reaccelerate materially. I do not see enough evidence of either in this dataset.
The quarterly pattern reinforces that skepticism. The latest four quarters total about $8.01B in revenue and roughly $1.18B in net income, so the business is still humming, but year-over-year progress is meager: the most recent quarter was $1.96B versus $1.84B a year earlier, while the prior quarter was $1.81B versus $1.73B, and before that $2.36B versus $2.46B. This is not a strong reacceleration; it is a mixed, low-growth cadence. Meanwhile, the valuation already treats Williams-Sonoma more like an elite branded compounder than a mature discretionary retailer. The extreme ROE and ROIC figures are flattering but need context: with only $2.08B of equity supporting a $27.7B market value, buybacks and capital-light economics magnify those ratios. They indicate efficiency, not invulnerability. A 13.9x book multiple for a retailer with a flat sales base is hard to defend unless one believes the moat is widening meaningfully.
The best case against my view is straightforward: I may be underestimating just how unusual this business is. Very few retailers can hold gross margin above 46%, operating margin around 18%, net margin around 14%, generate over $1B of FCF, and do it with no debt. If those economics are structurally tied to a premium customer, strong brand portfolio, and omnichannel execution, then Williams-Sonoma deserves to trade well above ordinary retail comps. The latest quarter’s 17.3% net margin is especially hard for bears to wave away, and the annual revenue decline from the post-pandemic peak has stabilized rather than continued. A smart bull would say the market is not paying for growth so much as paying for durability, capital returns, and anti-fragility in a weak consumer backdrop. That argument has force; it is why I do not think this is an obvious short despite the rich multiple.
What would change my mind is evidence that the company can turn from “flat sales, great margins” into even modest sustained growth without sacrificing profitability. If annual revenue can move from $7.8B to above $8.3B while holding operating margin above 16%, the current multiple becomes much easier to underwrite. Alternatively, if quarterly revenue growth starts printing consistently in the mid-single digits and free cash flow remains above $1.1B, I would concede the premium is deserved. On the other hand, if revenue slips back below $7.7B annually or net margin normalizes toward 11-12%, the stock should not be anywhere near $235 and likely belongs closer to a high-teens earnings multiple, implying something more like $170-$190 on current earnings power.
Grok Reading
Williams-Sonoma at $235 is a pristine balance-sheet story wrapped around a stalled top line. Fiscal 2026 revenue of $7.81B is only 1.3% above the prior year’s $7.71B and still 10% below the $8.67B peak of FY2023; the five-year revenue CAGR is effectively zero at 0.4%. Net income of $1.09B produced a 13.9% net margin and $1.06B of free cash flow on just $259M of capex, with zero debt and $1.02B cash—an ROE of 52% and an ROIC near 100%. Those capital-return metrics are elite, yet the market is paying 26.6× trailing earnings, 3.7× sales and 13.9× book for a specialty retailer whose recent earnings are down 3.3% year-over-year and whose free-cash-flow CAGR is minus 16%. The most recent quarter ($1.96B revenue, 17.3% net margin) shows the engine still runs hot in absolute terms, but absolute cash generation without growth does not justify a compounder multiple.
The quantitative models that pin fair value near $85–95 are too punitive on a debt-free 14%-margin franchise that converts more than 80% of operating cash into FCF, yet the directional conclusion is correct: $235 embeds permanence of post-pandemic home-spend intensity that the income statement has already begun to reverse. A normalized mid-teens earnings multiple on ~$1.1B of sustainable net income points closer to $150–170; anything above that requires either re-acceleration of revenue into the mid-single digits or further operating-margin expansion beyond the already-elevated 18.1%. Neither is visible in the trailing data. Insider activity has been net selling in sizeable blocks (16.9k, 8.6k, 5.2k shares) even as awards trickle in, and the narrative layer correctly flags a fragile “fallen-angel” premium—the 2.75× gap between price and cash-flow anchor rests on discretionary consumer resilience and housing turnover that macro headwinds currently undermine.
The strongest rebuttal is that WSM is not a typical cyclical retailer: 46% gross margins, fortress liquidity, and sector-leading brand equity have historically allowed it to defend profitability through demand soft patches, and the latest August quarter’s 17.3% net margin demonstrates pricing power still intact. A smart opponent would argue that 26× is merely the market correctly capitalizing scarce high-ROIC retail capacity, that buybacks and the 1.2% dividend recycle the $1B-plus FCF into per-share growth the top line lacks, and that any housing-market thaw would re-rate the stock violently higher. Those points have merit on quality, but they do not erase the arithmetic: you are paying growth-stock dollars for mature-earner volume, and FCF is already declining. Quality reduces the downside; it does not manufacture the missing growth.
I would reverse to neutral or constructive only on two hard catalysts: two consecutive quarters of revenue growth at or above 5% year-over-year with net margins holding above 14%, or a clear inflection in U.S. existing-home sales and housing turnover that historically leads WSM’s order book by one to two quarters. Absent those, the stock remains a high-quality name priced for an outcome the numbers no longer support.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Williams-Sonoma is running as a high-quality mature earner: gross margin has expanded from 44% (2022) to 46.2% (2026), operating margin sits at 18.1%, and net income of $1.09B converts into $1.06B of free cash flow (OCF/NI 1.27x, accruals -5.2% of assets). The balance sheet carries $1.02B of net cash with no external funding need, and mechanical fraud/distress screens (Beneish -2.59, Altman Z 7.85) are clean. This is unusually strong economics for specialty home retail, and revenue stability around $7.7-7.8B through a soft furniture cycle suggests brand pricing power rather than promotional dependence. Insider activity is routine selling by the CEO and one other officer (~$8M over 12 months, no buys) - not alarming for a mature cash-return story but not a positive signal either. The one thing that doesn't fit the picture is the diluted share count series in the brief: 76.4M to 130.5M then drifting to 123.2M, with a flagged 12.7% diluted CAGR. That is inconsistent with WSM's long-standing aggressive buyback program and the reported buyback/SBC ratio of 789% and SBC of only 1.4% of revenue. This almost certainly reflects a stock split effect in the reported series rather than real dilution - actual share count has been shrinking for years - but I flag it rather than assume it. If real, it would be a material quality knock; if a split artifact, per-share discipline is actually a strength.
Verify before trusting this (6)
- Reconcile the diluted share count series (76.4M to 123.2M) against the 10-K - confirm whether this reflects a stock split versus actual issuance
- Actual buyback dollars deployed each year and current authorization remaining
- Segment mix (Pottery Barn, West Elm, Williams Sonoma, Pottery Barn Kids/Teen) and whether GM gains are sustainable or promotional-driven
- B2B revenue contribution and growth - the non-consumer channel is the main growth vector
- Lease obligations and store footprint direction (mature retailer store rationalization)
- Any 10b5-1 plan disclosures behind the CEO July sale cluster
The e2e composite fair value of $95.44 (signal-adjusted $85.16) versus a $235.09 price implies roughly -60% downside, and the two underlying methods - DCF at $106 and EPV floor at $74 - actually agree in direction even if the magnitude looks extreme. A -64% gap is large enough that I discount the precise number (methods likely undershoot a brand-fortress retailer generating elite ROICs and near-100% cash conversion), but the direction is clear: the market is capitalizing peak post-pandemic margins as durable, not cyclical. On a business earning what mature specialty retailers historically earn, deserved value sits meaningfully below spot.
Verify before trusting this (5)
- Actual diluted share count trajectory and buyback pace in the latest 10-Q/K
- Segment-level operating margin trends (Pottery Barn, West Elm, WS core) to gauge cyclical vs structural mix
- Management commentary on furniture demand, promotional intensity, and category comps
- Occupancy/real-estate cost trajectory as leases reset
- Any one-time freight/supply-chain tailwinds still embedded in gross margin
The pressure on WSM right now is decisively positive. Q2 landed with a comp beat, raised full-year guide, and a chorus of supportive sell-side notes (UBS, RBC) plus a Cramer defense of the initial selloff. That converts a fragile fallen-angel narrative into a short-term momentum story: the bear thesis (post-pandemic reversal, margin compression) needs fresh evidence to reassert itself, and this print did the opposite. Add an AI-conversion angle (Olive agent, 3x conversion) and the tape has a cheap narrative hook to latch onto.
Verify before trusting this (4)
- Whether sell-side target revisions in the next 2 weeks push consensus meaningfully higher or stall
- Any softening in high-end consumer data that would reignite the trade-down bear thesis
- Follow-through in operating margin next quarter - the one crack bears can exploit
- Sector rotation out of consumer cyclicals if the risk-on regime breaks
The home-furnishings world is defined by a frozen housing market: with the 10y at 4.67 and the curve barely positive, existing-home turnover — the single biggest demand trigger for furniture — remains depressed, so category growth is coming from price, premiumization and share shifts rather than units. Against that, the pandemic pull-forward of durables has now been fully lapped, so the cyclical drag is fading even without a rate cut. Tariffs on imported home goods are the live cost variable; scaled retailers with sourcing flexibility and pricing power (WSM) absorb them better than smaller DTC entrants, which is quietly consolidating the category. Net: a steady, no-boom-no-bust setting where WSM's earnings direction depends more on its own margin discipline and share defense than on any macro inflection.
When we made this prediction on Aug 30, 2026, WSM was $235.09. We expect it to be $214.00 by Mar 2027, and we consider it great value under $165.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 30, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.