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OLDER Analysis Report
Aug 30, 2026
38 days ago · 100% complete
This report is 38 days old — newer filings and price moves since then are not reflected.
For AI assistants & researchers — machine-readable summary of this page

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

Page map (sections in order; each card carries a stable reference-name attribute you can cite):

  • profile-header / price-overview — company profile, live quote, market cap
  • extended-analysis — the core: three AI lens reads with findings, scores, and the analyst memo
  • future-predictions — our forward price-band predictions
  • market-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): price-history, income-trend, key-metrics, financials (statement tables), insider-trading. The analysis above is public; the raw data tables require a free account.

More for machine readers: site briefing at /llms.txt · any ticker resolves at delvantic.com/stock/TICKER · raw inputs are public-company filings and market data (via licensed data feeds); every model, score, lens read, and prediction on this page is Delvantic's own analysis.

Williams-Sonoma, Inc.

WSM NYSE
Consumer Cyclical · Specialty Retail
San Francisco, CA 94109, United States williams-sonomainc.com Updated Aug 30, 2:30am
Price
$235.09
Market Cap
$27.7B
Employees
19,800
Beta
1.47
Avg Volume
955,467
Last Dividend
$2.84
CEO
Ms. Laura J. Alber

Williams-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.

Runs with full report Generated: Aug 30, 2026 2:38am
Price Overview
Price at report time
$235.09
as of Aug 30, 2:30am (38d ago)
Change · Aug 30
-3.31 (-1.39%)
Day Range
$231.42 – $238.99
52-Week Range
$165.51 – $254.89
50-Day MA
$233.43
200-Day MA
$203.43
Volume
972,400.00
Right now · live
Log in to get the live feed
Members see the real-time price and the move since this report (over 38d).
Share Structure
Outstanding 117,742,670.00
Float 116,231,384.00
Free Float 98.7%
High free float — 98.7% of shares trade freely, ~1.3% held by insiders/institutions
Very liquid — most shares trade freely. Low insider ownership can mean less management alignment, but makes large position sizing straightforward.
Price History (1 Year)
Last updated: Aug 30, 2026 2:48am (38d ago)
Revenue & Net Income Trend
The directional story — useful even when net income is negative.
Last updated: Aug 30, 2026 2:38am (38d ago)
Revenue
The top line — total sales before any costs or taxes are subtracted. A measure of how much business the company is doing.
Net Income
The bottom line — profit left after subtracting all expenses, interest, and taxes from revenue. Reflects accounting profitability, but includes non-cash items like depreciation, so it isn't the same as cash earned.
Operating Cash Flow
The real cash generated by the day-to-day business — selling products, paying suppliers, collecting from customers. Calculated from net income by adding back non-cash items and adjusting for timing (unpaid bills, unsold inventory). When OCF consistently lags net income, the reported profit may not be converting to real money.
Period Revenue Net Income Net Margin YoY/QoQ
Key Metrics
TD Twelve Data statement HEX SEC filing
Industry comparison last run: Aug 30, 2026 2:36am
P/E · trailing (TTM) (Price per dollar of earnings over the past year — not a run-rate or forward P/E)
HEX
Stock Price / EPS (Diluted)
26.59
Stock Price: $235.09
EPS (Diluted): 8.84
P/B Ratio (Price vs net asset value)
HEX
Stock Price / Book Value Per Share
13.90
Stock Price: $235.09
Total Equity: $2.08B
Shares: 123,153,000
EV/EBITDA (Total value vs operating profit)
HEX
Enterprise Value / EBITDA
16.71
Market Cap: $27.69B
Total Debt: $0.00
Cash: $1.02B
EBITDA: $1.65B
Enterprise Value (Takeover price (cap + debt - cash))
HEX
Market Cap + Total Debt - Cash
$27.5B
Market Cap: $27.69B
Total Debt: $0.00
Cash: $1.02B
Gross Margin (Revenue left after direct costs)
HEX
Gross Profit / Revenue
46.2%
Gross Profit: $3.60B
Revenue: $7.81B
Operating Margin (Revenue left after all operations)
HEX
Operating Income / Revenue
18.1%
Operating Income: $1.42B
Revenue: $7.81B
Net Margin (Revenue left as actual profit)
HEX
Net Income / Revenue
13.9%
Net Income: $1.09B
Revenue: $7.81B
ROE (Profit from shareholder equity)
HEX
Net Income / Total Equity
52.3%
Net Income: $1.09B
Total Equity: $2.08B
ROIC (Profit from all invested capital)
HEX
NOPAT / Invested Capital
99.8%
Operating Income: $1.42B
Tax Rate: 25.1%
Equity: $2.08B
Total Debt: $0.00
Cash: $1.02B
Zero debt — invested capital = equity minus cash (very efficient)
Current Ratio (Can it pay short-term bills)
HEX
Current Assets / Current Liabilities
1.39
Current Assets: $2.71B
Current Liabilities: $1.95B
Debt/Equity (Leverage — debt vs equity)
HEX
Total Debt / Total Equity
0.00
Short-Term Debt: $0.00
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $2.08B
Zero debt — this company carries no debt obligations. Strongest possible score.
Rev/Share (Top-line per share)
HEX
Revenue / Shares Outstanding
$63.39
Revenue: $7.81B
Shares: 123,153,000
Book Value/Share (Net assets per share)
HEX
(Total Assets - Total Liabilities) / Shares
$16.91
Total Equity: $2.08B
Shares: 123,153,000
FCF/Share (Real cash generated per share)
HEX
(Operating Cash Flow + CapEx) / Shares
$8.57
Operating CF: $1.31B
CapEx: -$259.44M
Shares: 123,153,000
CapEx is negative (outflow) — added to OCF to get FCF
Div Yield (Annual income from holding)
TD
Last Annual Dividend / Stock Price
1.2%
Last Dividend: $2.84
Stock Price: $235.09
Payout Ratio (Earnings paid out as dividends)
HEX
Dividends Paid / Net Income
—
Dividends Paid: N/A
Net Income: $1.09B
Dividends paid not available in cash flow statement
Industry Benchmarks
Last run: Aug 30, 2026 2:36am
Compares WSM against LLM-researched typical ranges for its industry. One research call per industry, cached indefinitely — every stock in the same industry reuses the same baseline.
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 — — —
0Company Classification 1Industry Landscape 2Company Momentum 3Forward Projection 4aDCF Valuation 4bEarnings Power Value 4cAnchored PE 4dReverse DCF 4eRevenue-Based DCF 4fAnchored P/S 4gScenario Analysis 4hDividend Discount Model 4iBook Value Analysis 4jInsider Activity 4fCash Flow Quality 4gDebt Maturity Risk 4hMacro Environment 4iSector Intelligence 4jRevenue Confidence 4kSensitivity Analysis 4lSector Demand Cycle 5AI Investigation 5bThesis Evaluation 6Valuation Synthesis
computed not applicable 18 computed · 6 not applicable
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-10-05 02:01
-0.8 : 1 +1σ upside vs −1σ downside, from this company's own quarterly history
A +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
CaseGrowthMarginFair valuevs 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%
The next quarters keep the trajectory of the worst recent matched quarter (ending 2026-02-01) — growth stays at -4.3% and margins bend by the same profit-vs-revenue ratio (×0.94). Stress is a trajectory, not a prediction — it answers "what if the ship's current heading simply continues," which history says is the case to respect.
Why this is appearing: this company files quarterly, so its recent trajectory could be measured rather than assumed — the engine matched Aug 2026, May 2026 against the same quarters one year earlier and found revenue +5.6% · operating income +19.7% · net income +18.9% year-over-year. That measured heading is what the stress case extends forward. Of those, the stress case extends the worst matched quarter — the one ending Feb 1, 2026 (revenue -4.3%, operating income -9.9% YoY) — not the average. Data measured through Aug 2, 2026 — this card recalculates automatically when the next quarterly filing is ingested. Companies without quarterly filings (many foreign listings) never show this card: with no measured trajectory, there is nothing honest to repeat.
Narrative Economics
The story the market is telling about this stock — the intangible X-factor (founder mythology, cult dynamics, TAM-of-imagination) that moves price beyond what cash flows alone explain. After Shiller, Narrative Economics.
No narrative profile yet for WSM — it's generated by the pipeline (market-narrative step).
Growth Outlook
Analyzed 2026-08-30 02:56

The 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.

Holding Two recent quarters of +5.6% revenue and +20% operating income show a real stabilization off a flat multi-year base, but WSM is still growing slower than its 6-7% category and the profit gains are margin-led rather than demand-led — flat-to-modest growth is the honest structural read. conf 6/10
Share loss Category growing · Specialty retail / home furnishings is compounding at ~6.4% with recent industry YoY near 7.2%; WSM's annual recent YoY is 1.2%, a -6pt gap, though the two newest matched quarters at +5.6% are roughly at category pace. So: multi-year share loser now stabilizing to roughly in-line growth, without yet reclaiming lost share.
Next 2 quarters
Growing
The two most recent matched quarters already print +5.6% revenue and ~+20% operating income against easy comps, and the beat cadence (5 of last 5 EPS prints at or above estimate, including +38%) shows the margin lever is still delivering ahead of what is modeled. Nothing in the near-term setup reverses that before comps get harder.
↑ above expectations
Year 1
Holding
Full-year revenue lands low-to-mid single digit at best: the newest quarters benefit from soft comps that harden through the back half, housing turnover offers no volume tailwind, and the company is still not out-growing its category. Earnings grow faster than revenue but the incremental margin lever narrows as prior-year cost benefits lap.
≈ inline with expectations
Years 2–3
Holding
Structural earnings power is roughly stable, not compounding: a 0.4% multi-year revenue CAGR, a persistent -6pt gap to category growth, and negative FCF CAGR say the franchise is defending rather than expanding. Margin expansion is a one-time reset, not a growth engine; without recapturing share or a genuine housing-turnover recovery, earnings power holds near current levels with modest upside from buyback-driven per-share math.
↓ below expectations
The creme: each rung's call measured against what's already printed (vs analyst estimates · vs guidance / FY consensus · vs price-implied growth) — expectations in print are already in the price, so only the variant margin can pay. Hover a rung's chip for the margin read.
Growth drivers
63 Margin-led earnings leverage — Operating income +19.7% and net income +18.9% on +5.6% revenue in the two most recent matched quarters means ~14pts of margin leverage — sourcing diversification, reduced promotional depth, and supply-chain/freight discipline are converting modest top-line into outsized profit. This mechanism persists as long as the company holds full-price selling discipline.
51 Sequential reacceleration off a flat base — Multi-year revenue CAGR of 0.4% and annual recent YoY of 1.2% versus +5.6% in the newest two matched quarters implies the post-pandemic digestion of durables has largely lapped. Comparisons are now easy and the direction of change has turned positive, which is a distinct signal from the decelerating multi-year trend flag.
31 Brand portfolio breadth and B2B/franchise channels — Pottery Barn, West Elm, Rejuvenation and the contract/B2B business give multiple independent demand pools; B2B (hospitality, office, multi-family) is not tied to consumer housing turnover and has been a growth vector that partially offsets weak retail furniture demand.
32 Housing-turnover optionality — Big-ticket home furnishing demand keys off existing-home sales, which sit near multi-decade lows with the 10y at 4.67. Any move down in mortgage rates releases pent-up moving/nesting demand directly into WSM's largest categories — an unowned call option on the cycle, not a base case.
Growth risks
63 Persistent share loss to the category — Industry revenue compounding at 6.4% over three years and 7.2% recent YoY against WSM's 1.2% annual print is a -6pt gap. Even with the newest quarters at +5.6%, the company is at best matching the category, not recovering the ground lost — consistent with encroachment from Arhaus, RH, Wayfair and DTC furniture brands.
50 Discretionary big-ticket exposure under macro headwinds — Furniture and home decor are among the most deferrable consumer purchases. A macro-headwind backdrop with elevated long rates and trade-down behavior in the middle-income cohort caps unit volume growth; WSM's recent strength is disproportionately price/mix and margin, which is a thinner form of growth.
42 Tariff and sourcing cost pressure — A largely imported furniture assortment leaves gross margin exposed to tariff escalation. The current margin expansion is the core of the earnings story, so any COGS shock or a return to promotional intensity to defend traffic would unwind the profit leverage quickly.
43 Margin leverage is a finite lever — Operating income growing ~4x revenue cannot continue for many years; once occupancy, promo and freight benefits fully lap, earnings growth converges toward the low-single-digit top line. FCF CAGR of -15.9% also argues cash conversion is not tracking reported earnings gains.
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.
Growth position composite -8
ShrinkingStallingHoldingGrowingAccelerating
70Next 2 quarters · Growing
50Year 1 · Holding
50Years 2–3 · Holding
-8Composite (−100…+100)
A research prediction, not advice. Forward-graded: each rung is scored against the prints that follow it. Not an input to the GEM designation — track record first.
Claude Reading
Independent analyst synthesis · claude-opus-4-7 · generated 2026-08-30 02:47:48
Verdict Modestly overvalued, not catastrophically so — fair value $170-195 vs synthesis's $85; wait for Q4 holiday print or sub-$190 entry before acting long, avoid shorting a 100%-ROIC/zero-debt fortress.

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
Independent reading · gpt-5.4 · generated 2026-08-30 02:48:02
Verdict Overvalued at $235 — a superb retailer with fortress margins and cash flow, but the market is paying a luxury multiple for a business whose revenue has gone nowhere; fair value looks closer to $180 than $235.

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
Independent reading · grok-4.5 · generated 2026-08-30 02:48:34
Verdict Overvalued at $235 — quality cash compounder but ~26× P/E and ~$28B cap on ~0% revenue growth; fairer zone $150–170

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
Each AI above independently stated a direction (undervalued, fairly valued, or overvalued) and how strongly it believes it (conviction, 0–5). We combine those into a Bull-Bear Index on a 0–10 scale: 5 is neutral, 10 is maximum bullish (undervalued at full conviction), 0 is maximum bearish. We compute the score ourselves with the same arithmetic for every seat — the models never grade their own bullishness — so the three are directly comparable. Δ shows how far each seat sits from the panel average of 1.3; a large Δ marks the dissenting voice, usually the one worth reading.
Claude claude-opus-4-7 2.0
overvalued · conviction 3/5 · Δ +0.7 vs panel · self: 4.0
GPT gpt-5.4 1.0
overvalued · conviction 4/5 · Δ -0.3 vs panel · self: 3.0
Grok grok-4.5 1.0
overvalued · conviction 4/5 · Δ -0.3 vs panel · self: 3.0
Advanced Analysis Forensic deep-dive · separate lenses
Separate reads — Company Quality (is it a great business?), Valuation (is it mispriced?), and General Sentiment (how macro + narrative are pushing it), kept deliberately apart · 2026-08-30 02:58:46
Delvantic - Cairn AI
Quality name, rich - wait for a dip 7/10
Elite retailer, wrong price - Q2 beat-and-raise tape can carry it further, but $235 already pays for peak margins as permanent.
The cruxWhether the current ~46% gross / 18% operating margin structure is durable through a real consumer downcycle, or a peak that mean-reverts and collapses the multiple.
Forensic checks Derived mechanically from WSM's filed financials — not from the AI lenses
Liquidity & RunwaySelf-Funding
DilutionHeavy Dilution
Earnings QualityHigh Earnings Quality
The four lensesswitch a tab for its full read — score + evidence
Company Quality
+54
Strong
edge √Σ 132 · risk √Σ 72 · conf 8/10

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.

Strengths 4
m78
Elite margins for specialty retail
Gross margin expanded to 46.2% and operating margin to 18.1% in 2026, up from 44%/17.6% in 2022 - rare durability for a home-furnishings retailer through a weak category cycle.
m72
Clean cash conversion
FCF of $1.06B on $1.09B net income (OCF/NI 1.27x), accruals -5.2% of assets, Beneish -2.59 - reported earnings are backed by cash with no manipulation signals.
m65
Fortress-lite balance sheet
$1.02B net cash, Altman Z 7.85, self-funding operations - zero survival risk and full optionality on capital return.
m45
Buyback dominates SBC
Buyback/SBC ratio of 789% with SBC only 1.4% of revenue indicates management prioritizes shrinking the share count over stock-based comp - assuming the share series is split-adjusted.
Concerns 4
m55
Reported diluted share count inconsistency
The 76.4M-to-123.2M diluted share series and 12.7% CAGR flag conflict with the 789% buyback/SBC ratio and WSM's known repurchase history; likely a split-adjustment artifact but material if literal.
m30
Revenue plateau
Revenue has been flat-to-down: $8.25B (2022), $8.67B (2023), $7.75B, $7.71B, $7.81B - margins are doing the heavy lifting; top-line growth is not currently a quality tailwind.
m22
One-sided insider tape
7 sells totalling ~$8.1M (CEO Alber ~$7.8M in a single July window) and zero open-market buys in 12 months; not unusual for a mature payer but no insider conviction signal.
m28
Cyclicality exposure
Category (furniture/home) is discretionary and housing-linked; margin resilience through the current soft patch is impressive but the durability of 46% gross margins across a deeper downturn is unproven.
This is a genuinely well-run specialty retailer with margins that would flatter most consumer-staples names, converting nearly all earnings to cash and sitting on a billion in net cash. My hesitation is not about integrity - the forensic screens are clean - but about the reported dilution series that contradicts everything else I see about capital allocation here; I want to see the filing before either praising or penalizing per-share discipline. Setting that aside, the business is Strong: high floor from cash flow and margin quality, ceiling capped by a flat top line and the fact that a 46% gross margin in home furnishings has yet to be stress-tested in a real recession.
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
Valuation / Mispricing
-70
Rich
edge √Σ 30 · risk √Σ 117 · conf 6/10
Price $235 vs composite deserved ~$95 and a quality-adjusted deserved ~$150-180 - roughly 30-55% above any defensible value; no margin of safety. attractive below $165.00

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.

Cheap signals 1
m30
Balance sheet and cash conversion support a premium
Near-billion net cash, elite ROIC, and clean earnings quality justify lifting deserved value above the mechanical DCF/EPV output - but not to $235.
Rich / priced-in 4
m72
Composite FV implies -64% downside
Composite $95.44 and signal-adjusted $85.16 versus $235.09 price. Even discounting the magnitude for method conservatism, both DCF ($106) and EPV ($74.33) point the same way.
m65
Priced for peak margins as permanent
Current multiple capitalizes pandemic-era home-category operating margins as structural. Any mean reversion toward pre-2020 mid-single-digit-to-low-teens margins compresses earnings and multiple simultaneously.
m55
Cyclical discretionary with no cycle discount
Specialty home furnishings is discretionary and housing-turnover linked, yet the stock trades as if it were a staple. Bear case (trade-down, category softness) is essentially absent from the price.
m35
Fair-value methods likely too harsh, but direction robust
A composite 60% below spot for a brand-fortress retailer smells like models under-crediting durable pricing power; still, even a generous 60-80% uplift to composite leaves the stock rich.
Fully to richly valued. The business is genuinely excellent - I do not dispute that - but at $235 I am paying for permanent peak margins in a discretionary category, and the composite FV work, even if too punitive in absolute terms, points hard the wrong way. I would want the stock closer to $165 before the risk/reward interests me, and I would get louder about it under $130.
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
General Sentiment
+19
Tailwind
tail √Σ 84 · head √Σ 64 · conf 7/10

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.

Tailwinds 3
m70
Q2 beat plus raised guide plus analyst upgrades
UBS and RBC positive, Cramer defending, comps accelerating to +6.2% - this is the exact kind of confirming news flow that pressures a fallen-angel higher near term regardless of DCF gap.
m35
Risk-on tape with low VIX
VIX 14.4 and a mildly risk-on regime is friendly to a beta 1.47 consumer cyclical; the tape amplifies good news rather than muting it.
m30
AI-agent narrative hook
Olive AI driving 3x conversion gives WSM a light AI-adjacent story in a market that rewards it - not a cult driver but a positive framing addition.
Headwinds 3
m45
Fragile narrative, stretched multiple risk
Story is 'fallen-angel' with fragile durability; bears argue price embeds permanently elevated margins. Any macro consumer wobble flips the narrative fast given 1.47 beta.
m35
Operating margin slippage flagged
News flow explicitly notes non-GAAP operating margin fell even as demand rose - gives the bear camp a lever if the next print doesn't restore leverage.
m30
Rates and market PE overhang
10y at 4.67% and market PE 25.9 create a persistent valuation ceiling for a discretionary cyclical trading at a premium multiple.
Net tailwind, and it is stock-specific: a beat-and-raise into a calm tape with fresh analyst support is exactly the setup where a fallen-angel gets its multiple defended for another quarter. The fragile narrative and premium multiple mean this pressure can flip fast on any macro consumer crack, but right now the news flow, analyst tone, and regime all point the same direction - higher. I would lean into the tailwind while respecting that durability is thin.
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 market-wide tape + this name's exposure to it (beta / sector / narrative durability). Context on the non-fundamental pressure — not a call on the business or the price. processId: detail-general-sentiment
Growth Outlook
-8
Holding
edge √Σ 92 · risk √Σ 100 · conf 6/10

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.

Growth drivers 4
m63
Margin-led earnings leverage
Operating income +19.7% and net income +18.9% on +5.6% revenue in the two most recent matched quarters means ~14pts of margin leverage — sourcing diversification, reduced promotional depth, and supply-chain/freight discipline are converting modest top-line into outsized profit. This mechanism persists as long as the company holds full-price selling discipline.
m51
Sequential reacceleration off a flat base
Multi-year revenue CAGR of 0.4% and annual recent YoY of 1.2% versus +5.6% in the newest two matched quarters implies the post-pandemic digestion of durables has largely lapped. Comparisons are now easy and the direction of change has turned positive, which is a distinct signal from the decelerating multi-year trend flag.
m31
Brand portfolio breadth and B2B/franchise channels
Pottery Barn, West Elm, Rejuvenation and the contract/B2B business give multiple independent demand pools; B2B (hospitality, office, multi-family) is not tied to consumer housing turnover and has been a growth vector that partially offsets weak retail furniture demand.
m32
Housing-turnover optionality
Big-ticket home furnishing demand keys off existing-home sales, which sit near multi-decade lows with the 10y at 4.67. Any move down in mortgage rates releases pent-up moving/nesting demand directly into WSM's largest categories — an unowned call option on the cycle, not a base case.
Growth risks 4
m63
Persistent share loss to the category
Industry revenue compounding at 6.4% over three years and 7.2% recent YoY against WSM's 1.2% annual print is a -6pt gap. Even with the newest quarters at +5.6%, the company is at best matching the category, not recovering the ground lost — consistent with encroachment from Arhaus, RH, Wayfair and DTC furniture brands.
m50
Discretionary big-ticket exposure under macro headwinds
Furniture and home decor are among the most deferrable consumer purchases. A macro-headwind backdrop with elevated long rates and trade-down behavior in the middle-income cohort caps unit volume growth; WSM's recent strength is disproportionately price/mix and margin, which is a thinner form of growth.
m42
Tariff and sourcing cost pressure
A largely imported furniture assortment leaves gross margin exposed to tariff escalation. The current margin expansion is the core of the earnings story, so any COGS shock or a return to promotional intensity to defend traffic would unwind the profit leverage quickly.
m43
Margin leverage is a finite lever
Operating income growing ~4x revenue cannot continue for many years; once occupancy, promo and freight benefits fully lap, earnings growth converges toward the low-single-digit top line. FCF CAGR of -15.9% also argues cash conversion is not tracking reported earnings gains.
vs expectations: ~6m above · 1y inline · 2-3y below
The forward growth verdict — is the business itself likely to grow (next 2 quarters / year 1 / years 2–3), judged against its category and against printed expectations. The full horizon ladder + creme renders on the Growth Outlook card above. Not a call on the price (Valuation owns that) or the tape (Sentiment owns that).
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Lenses kept deliberately separate — Company Quality (price-agnostic), Valuation (price-conditional), General Sentiment (non-fundamental macro/narrative pressure), and Growth Outlook (the forward growth verdict). The scores are not blended. Filing-level items (convertibles, lock-ups, customer concentration) are v2 — see each lens's "verify."
Price Prediction
Lower -9.0% v0.6.0 View full prediction →

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.

Price when predicted$235.09
Our estimate for Mar 2027$214.00-9.0%
Great value below$165.00
Price history shown (6 Months)

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.

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My Notes personal — only you see this
v1.1.760 · f4b58a28 · 2026-10-07 20:07:48