Will You Be Comfortable Buying Williams-Sonoma Stock?
The stock looks fairly priced at the moment, though history suggests you may benefit from buying dips. Consider the following data:
- Size: A $24 Bil company with $7.8 Bil in revenue currently trading at $192.17.
- Fundamentals: Last 12 month revenue growth of 1.6% and operating margin of 18.0%.
- Liquidity: Has Debt to Equity ratio of 0.1 and Cash to Assets ratio of 0.2
- Valuation: Currently trading at P/E multiple of 21.7 and P/EBIT multiple of 16.9
- Has returned (median) 107% within a year following sharp dips since 2010. See WSM Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for WSM, see Buy or Sell WSM Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and WSM drops another 20-30% to $134.52 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Williams-Sonoma (WSM) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: WSM provides an omni-channel retail experience offering cookware, dining, furniture, home decor, and kids’ accessories across multiple specialized brands.
2022 Inflation Shock
- WSM stock fell 52.4% from a high of $110.81 on 16 November 2021 to $52.73 on 24 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 February 2024
- Since then, the stock increased to a high of $217.71 on 18 February 2025 , and currently trades at $192.17
| WSM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -52.4% | -25.4% |
| Time to Full Recovery | 629 days | 464 days |
2020 Covid Pandemic
- WSM stock fell 60.0% from a high of $38.30 on 17 January 2020 to $15.33 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 29 May 2020
| WSM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -60.0% | -33.9% |
| Time to Full Recovery | 72 days | 148 days |
2018 Correction
- WSM stock fell 37.6% from a high of $36.47 on 23 August 2018 to $22.77 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 18 November 2019
| WSM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -37.6% | -19.8% |
| Time to Full Recovery | 329 days | 120 days |
2008 Global Financial Crisis
- WSM stock fell 87.1% from a high of $18.26 on 5 April 2007 to $2.36 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 February 2011
| WSM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -87.1% | -56.8% |
| Time to Full Recovery | 811 days | 1480 days |
Worried that WSM could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.