Is Williams-Sonoma, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Williams-Sonoma, Inc. has moved from fair to very attractive, indicating a shift towards a more favorable assessment. The company appears to be undervalued, especially when considering its P/E ratio of 17, which is significantly lower than the peer average of approximately 21.73 for similar companies. Additionally, the EV to EBITDA ratio stands at 11.19, while peers like Target Corp. show a much lower EV to EBITDA of 6.78, further supporting the undervaluation narrative.
In terms of performance metrics, Williams-Sonoma boasts an impressive ROCE of 106.64% and ROE of 51.70%, showcasing strong profitability relative to its equity. Compared to peers, Tractor Supply Co. is deemed expensive with a P/E of 32.73, while Ulta Beauty, Inc. has a P/E of 19.72, reinforcing the attractiveness of Williams-Sonoma's valuation. Over the past year, Williams-Sonoma has returned 30.18%, outperforming the S&P 500's return of 14.08%, which adds to the case for its undervaluation.