Williams-Sonoma, Inc. (WSM) DCF Valuation
TGM's two-stage DCF values Williams-Sonoma, Inc. (WSM) between $97.07 and $140.79 depending on assumptions, with a base case of $112.77. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (11.5%) reflects its beta.
What would today's price require?
$239.19 is justified only if free cash flow grows about +22.7% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 12.5% | $97.07 |
| Base case | 2.0%/yr | 11.5% | $112.77 |
| Optimistic | 5.0%/yr | 10.5% | $140.79 |
| Analyst DCF (FMP) | independent reference — different model | $90.45 | |
Current Price
$239.19
Market-Implied Growth
+22.7%/yr
vs -3.2% 5Y actual
Model Scenario Range
$97.07 – $140.79
model output — not a price target
WSM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for WSM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.1B · 0.12B shares · net cash $1.0B
Estimated Fair Value
$111.27
-53.5% vs $239.19
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $239.19; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $131 | $135 | $140 | $146 | $152 |
| 10.5% | $118 | $121 | $124 | $128 | $132 |
| 11.5% | $107 | $109 | $111 | $114 | $117 |
| 12.5% | $97.54 | $99.24 | $101 | $103 | $105 |
| 13.5% | $90.05 | $91.36 | $92.80 | $94.38 | $96.11 |
About Williams-Sonoma, Inc.
Williams-Sonoma, Inc. (WSM) functions as a specialized, multi-channel retailer offering a diverse array of products for the home. Its flagship Williams Sonoma brand is renowned for cooking, dining, and entertaining essentials, such as cookware, culinary tools, small appliances, flatware, dinnerware, barware, outdoor furnishings, and an extensive collection of cookbooks. This brand also provides home furnishings and decorative accents. The popular Pottery Barn brand features furniture, bedding, lighting, rugs, table linens, and decorative items. Targeting younger demographics, Pottery Barn Kids offers children's accessories, while Pottery Barn Teen caters to adolescents with products ranging from organic bedding to versatile, multi-purpose furniture. Furthermore, West Elm contributes a selection of stylish home decor to the company's portfolio. Complementing these are Rejuvenation, specializing in historically inspired, made-to-order lighting, hardware, furniture, and home accents, and Mark and Graham, which provides personalized accessories for women and men, travel goods, entertaining and bar essentials, home decor, and seasonal merchandise. The company also maintains an innovative 3-D imaging and augmented reality platform for the broader home furnishings and decor sector. Williams-Sonoma distributes its products through a robust omni-channel strategy, encompassing e-commerce platforms, direct-mail catalogs, and physical retail locations. The company boasts a significant retail footprint with 544 company-owned stores, including 502 across 41 U.S. states, Washington D.C., and Puerto Rico, alongside 20 in Canada, 19 in Australia, and 3 in the United Kingdom. An additional 139 franchised stores operate internationally, and the company extends its reach through e-commerce websites in countries like those in the Middle East, the Philippines, Mexico, South Korea, and India. Established in 1956, Williams-Sonoma, Inc. is headquartered in San Francisco, California.
- Sector
- Consumer Cyclical
- Industry
- Specialty Retail
- CEO
- Laura J. Alber