Headquartered in San Francisco, California, Williams-Sonoma Inc (WSM) sells shares at $136.39 a piece in the New York Stock Exchange. Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home.
It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks. 11,600 employees work for Williams-Sonoma Inc.
WSM reports EBITDA growth of 4%. Also, operating income is another beneficial feature of WSM. The company’s operating income grows at 7% y/y. Investors will most likely appreciate that WSM’s EPS grew a 11%. With this in mind, WSM is interesting. In my opinion, as more investors get to know these financial statistics of WSM, the stock demand will increase.
Regarding the shares outstanding, I appreciate that the shares outstanding decreased a -4%. In my opinion, the intrinsic valuation of each share increased, which could lead to an increase in the share price. The Chief Executive Officer said the following words about the company’s new $1 billion stock repurchase authorization:
“Our decisions to increase our quarterly dividend, to approve a new $1 billion share buyback authorization and to eliminate all outstanding funded debt reflect our confidence in the long-term outlook of our company, and our commitment to maximizing returns for our shareholders,” said Laura Alber, President and Chief Executive Officer.
WSM’s EV/Operating Cash Flow is equal to 8x. I believe that the company is undervalued. In Q1, WSM reported quarterly sales of $1764 million, and gross profit of $705 million. Besides, WSM is profitable. The company released positive quarterly EBITDA of $414 million. WSM also showed positive net income of $269 million. With this is in mind, either you buy shares or not, WSM is a company to be followed carefully.
With 79 million shares outstanding, at $136.39 per share, the market capitalization is equal to $11351-$10270 million. With annual sales of $7 billion, the company trades at 1.7x sales. To sum up, I believe that the company looks like a buy.
Disclosure: We don’t hold shares of WSM
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