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Note: i3PO best used on a laptop or desktop
How to Get Started
i3PO guides you through a 3-step process to evaluate risk vs reward for ~500 stocks. Start by making a selection below or, to go over the S&P 500 in total, click here.
or, make your selection directly in table below (clicking headers will sort).
Ticker | Name | Sector | % vs S&P 500 (3m) |
|---|---|---|---|
WSM | Williams-Sonoma Inc | Consumer Discretionary | -1.6 |
WDAY | Workday Inc | Information Technology | 6.4 |
WPX | WPX Energy Inc | Energy | -34.7 |
WW | WW International Inc | Consumer Discretionary | -30.6 |
WYND | Wyndham Destinations Inc | Consumer Discretionary | 2.4 |
WH | Wyndham Hotels & Resorts Inc | Consumer Discretionary | 7.9 |
WYNN | Wynn Resorts Ltd | Consumer Discretionary | -8.2 |
XEL | Xcel Energy Inc | Utilities | 1.3 |
XLNX | Xilinx Inc | Information Technology | 0.8 |
XPO | XPO Logistics Inc | Industrials | 3.2 |
XYL | Xylem Inc/NY | Industrials | 25.6 |
YELP | Yelp Inc | Communication Services | -17.8 |
YETI | YETI Holdings Inc | Consumer Discretionary | -2.5 |
YUM | Yum! Brands Inc | Consumer Discretionary | 0.9 |
ZEN | Zendesk Inc | Information Technology | 8.3 |
ZBH | Zimmer Biomet Holdings Inc | Health Care | 8.8 |
ZTS | Zoetis Inc | Health Care | 10.9 |
ZS | Zscaler Inc | Information Technology | 14.5 |
ZNGA | Zynga Inc | Communication Services | -12.5 |
PTON | Peloton Interactive Inc | Consumer Discretionary | 44.9 |
ZM | Zoom Video Communications Inc | Information Technology | 70.2 |
VRSK | Verisk Analytics Inc | Industrials | 1.3 |
VZ | Verizon Communications Inc | Communication Services | 3.6 |
VRTX | Vertex Pharmaceuticals Inc | Health Care | -15.3 |
VFC | VF Corp | Consumer Discretionary | 10.2 |
VIAC | ViacomCBS Inc | Communication Services | 20.5 |
VIAV | Viavi Solutions Inc | Information Technology | -11.7 |
V | Visa Inc | Information Technology | -4.3 |
VST | Vistra Corp | Utilities | -9.4 |
VMW | VMware Inc | Information Technology | -10.8 |
VG | Vonage Holdings Corp | Communication Services | -6.8 |
VMC | Vulcan Materials Co | Materials | 4.4 |
WAB | Westinghouse Air Brake Technol | Industrials | -1.3 |
WBA | Walgreens Boots Alliance Inc | Consumer Staples | -20.9 |
WMT | Walmart Inc | Consumer Staples | 8.5 |
DIS | Walt Disney Co/The | Communication Services | 4.5 |
WM | Waste Management Inc | Industrials | 3.3 |
W | Wayfair Inc | Consumer Discretionary | 31.4 |
WEC | WEC Energy Group Inc | Utilities | 4.8 |
WEN | Wendy's Co/The | Consumer Discretionary | -3.8 |
WERN | Werner Enterprises Inc | Industrials | -2.9 |
WCC | WESCO International Inc | Industrials | 6.3 |
WDC | Western Digital Corp | Information Technology | -16.3 |
WU | Western Union Co/The | Information Technology | -3.4 |
WRK | Westrock Co | Materials | 18 |
WMB | Williams Cos Inc/The | Energy | -0.9 |
TJX | TJX Cos Inc/The | Consumer Discretionary | -1.4 |
TOL | Toll Brothers Inc | Consumer Discretionary | 47.8 |
TSCO | Tractor Supply Co | Consumer Discretionary | 0.4 |
TTD | Trade Desk Inc/The | Information Technology | 5.1 |
TT | Trane Technologies PLC | Industrials | 31.7 |
RIG | Transocean Ltd | Energy | -56.2 |
TRU | TransUnion | Industrials | -10.9 |
TREX | Trex Co Inc | Industrials | 5.1 |
TRMB | Trimble Inc | Information Technology | 3.6 |
TRIP | TripAdvisor Inc | Communication Services | -2 |
TWLO | Twilio Inc | Information Technology | 4.6 |
TWTR | Twitter Inc | Communication Services | 30.6 |
TSN | Tyson Foods Inc | Consumer Staples | -9.7 |
UBER | Uber Technologies Inc | Industrials | 3.6 |
ULTA | Ulta Beauty Inc | Consumer Discretionary | 5.4 |
UAA | Under Armour Inc | Consumer Discretionary | 8.9 |
UNP | Union Pacific Corp | Industrials | 11.3 |
UAL | United Airlines Holdings Inc | Industrials | -10.4 |
UPS | United Parcel Service Inc | Industrials | 37.9 |
URI | United Rentals Inc | Industrials | 9.7 |
X | United States Steel Corp | Materials | -11.4 |
UNH | UnitedHealth Group Inc | Health Care | -6.2 |
URBN | Urban Outfitters Inc | Consumer Discretionary | 22.7 |
VLO | Valero Energy Corp | Energy | -26.1 |
VEEV | Veeva Systems Inc | Health Care | 8 |
SUM | Summit Materials Inc | Materials | -6.5 |
SPWR | SunPower Corp | Information Technology | 91 |
RUN | Sunrun Inc | Industrials | 189.7 |
SWCH | Switch Inc | Information Technology | -22.5 |
SNPS | Synopsys Inc | Information Technology | 0.9 |
SYY | Sysco Corp | Consumer Staples | 6.3 |
TMUS | T-Mobile US Inc | Communication Services | -4.7 |
TTWO | Take-Two Interactive Software | Communication Services | 10.5 |
TNDM | Tandem Diabetes Care Inc | Health Care | 19.1 |
TPR | Tapestry Inc | Consumer Discretionary | 23.2 |
TRGP | Targa Resources Corp | Energy | -32.1 |
TGT | Target Corp | Consumer Discretionary | 20.5 |
TEL | TE Connectivity Ltd | Information Technology | 13.3 |
FTI | TechnipFMC PLC | Energy | -18 |
TDOC | Teladoc Health Inc | Health Care | -4 |
THC | Tenet Healthcare Corp | Health Care | 15.8 |
TDC | Teradata Corp | Information Technology | 5.5 |
TER | Teradyne Inc | Information Technology | -14.6 |
TEX | Terex Corp | Industrials | -7.6 |
TSLA | Tesla Inc | Consumer Discretionary | 86.8 |
TXN | Texas Instruments Inc | Information Technology | 3.8 |
TXRH | Texas Roadhouse Inc | Consumer Discretionary | 10.2 |
TXT | Textron Inc | Industrials | -0.2 |
TMO | Thermo Fisher Scientific Inc | Health Care | 12.9 |
TIF | Tiffany & Co | Consumer Discretionary | -8.3 |
SRE | Sempra Energy | Utilities | -6.3 |
ST | Sensata Technologies Holding P | Industrials | 10.9 |
NOW | ServiceNow Inc | Information Technology | 8.8 |
SHAK | Shake Shack Inc | Consumer Discretionary | 18.3 |
SIRI | Sirius XM Holdings Inc | Communication Services | -16.8 |
SIX | Six Flags Entertainment Corp | Consumer Discretionary | -4.6 |
SKX | Skechers USA Inc | Consumer Discretionary | -5.3 |
SWKS | Skyworks Solutions Inc | Information Technology | 0.9 |
SMAR | Smartsheet Inc | Information Technology | -16.4 |
AOS | A O Smith Corp | Industrials | 12.5 |
SO | Southern Co/The | Utilities | -1.7 |
LUV | Southwest Airlines Co | Industrials | 6.2 |
SWN | Southwestern Energy Co | Energy | -3.5 |
SPR | Spirit AeroSystems Holdings In | Industrials | -25.6 |
SAVE | Spirit Airlines Inc | Industrials | -14.2 |
SPLK | Splunk Inc | Information Technology | -13.4 |
SPOT | Spotify Technology SA | Communication Services | -17.9 |
SFM | Sprouts Farmers Market Inc | Consumer Staples | -17.9 |
SQ | Square Inc | Information Technology | 38.1 |
SSNC | SS&C Technologies Holdings Inc | Information Technology | 2.3 |
SWK | Stanley Black & Decker Inc | Industrials | 10.1 |
SBUX | Starbucks Corp | Consumer Discretionary | 6.8 |
STLD | Steel Dynamics Inc | Materials | 2.7 |
SFIX | Stitch Fix Inc | Consumer Discretionary | 4.2 |
SYK | Stryker Corp | Health Care | 7.6 |
QCOM | QUALCOMM Inc | Information Technology | 19.8 |
PWR | Quanta Services Inc | Industrials | 25.4 |
DGX | Quest Diagnostics Inc | Health Care | -4.2 |
RL | Ralph Lauren Corp | Consumer Discretionary | -3.2 |
RRC | Range Resources Corp | Energy | 23.1 |
RTX | Raytheon Technologies Corp | Industrials | -10.7 |
REAL | RealReal Inc/The | Consumer Discretionary | 1.3 |
RRR | Red Rock Resorts Inc | Consumer Discretionary | 44.3 |
REGN | Regeneron Pharmaceuticals Inc | Health Care | -14.6 |
RSG | Republic Services Inc | Industrials | 9.5 |
RH | RH | Consumer Discretionary | 31.2 |
RNG | RingCentral Inc | Information Technology | -11.9 |
RHI | Robert Half International Inc | Industrials | -2.3 |
ROK | Rockwell Automation Inc | Industrials | -0.8 |
ROKU | Roku Inc | Communication Services | 37 |
ROST | Ross Stores Inc | Consumer Discretionary | -2.3 |
RCL | Royal Caribbean Cruises Ltd | Consumer Discretionary | 17.3 |
SAIL | Sailpoint Technologies Holding | Information Technology | 31.6 |
CRM | salesforce.com Inc | Information Technology | 19.8 |
SLB | Schlumberger NV | Energy | -14.3 |
STNG | Scorpio Tankers Inc | Energy | -24.3 |
STX | Seagate Technology PLC | Information Technology | -5.6 |
SEE | Sealed Air Corp | Materials | 13.5 |
SGEN | Seattle Genetics Inc | Health Care | 1.5 |
SEAS | SeaWorld Entertainment Inc | Consumer Discretionary | 27 |
PTEN | Patterson-UTI Energy Inc | Energy | -29 |
PAYX | Paychex Inc | Information Technology | -1.3 |
PYPL | PayPal Holdings Inc | Information Technology | 0.3 |
PBF | PBF Energy Inc | Energy | -44.2 |
PDCE | PDC Energy Inc | Energy | -22.6 |
PENN | Penn National Gaming Inc | Consumer Discretionary | 91.7 |
PNR | Pentair PLC | Industrials | 16.5 |
PEP | PepsiCo Inc | Consumer Staples | -4.9 |
PFE | Pfizer Inc | Health Care | 5.1 |
PM | Philip Morris International In | Consumer Staples | 2.6 |
PSX | Phillips 66 | Energy | -28.4 |
PING | Ping Identity Holding Corp | Information Technology | -13.1 |
PNW | Pinnacle West Capital Corp | Utilities | -3.2 |
PXD | Pioneer Natural Resources Co | Energy | -15.8 |
PLNT | Planet Fitness Inc | Consumer Discretionary | -13 |
PS | Pluralsight Inc | Information Technology | -9.8 |
PII | Polaris Inc | Consumer Discretionary | -7.6 |
PPG | PPG Industries Inc | Materials | 9.9 |
PPL | PPL Corp | Utilities | -3.2 |
PG | Procter & Gamble Co/The | Consumer Staples | 10.3 |
PEG | Public Service Enterprise Grou | Utilities | 5.9 |
PHM | PulteGroup Inc | Consumer Discretionary | 29.3 |
PSTG | Pure Storage Inc | Information Technology | -17.2 |
PVH | PVH Corp | Consumer Discretionary | 25.4 |
QRVO | Qorvo Inc | Information Technology | 8.9 |
NSC | Norfolk Southern Corp | Industrials | 18.6 |
NLOK | NortonLifeLock Inc | Information Technology | -0.5 |
NCLH | Norwegian Cruise Line Holdings | Consumer Discretionary | -13.6 |
NRG | NRG Energy Inc | Utilities | -15.5 |
NUE | Nucor Corp | Materials | 2.6 |
NTNX | Nutanix Inc | Information Technology | -6.7 |
NVDA | NVIDIA Corp | Information Technology | 23.6 |
OI | O-I Glass Inc | Materials | 7.3 |
OXY | Occidental Petroleum Corp | Energy | -45.5 |
OGE | OGE Energy Corp | Utilities | -8.1 |
OKTA | Okta Inc | Information Technology | -4.9 |
OLN | Olin Corp | Materials | -2.4 |
OLLI | Ollie's Bargain Outlet Holding | Consumer Discretionary | -16.1 |
OMC | Omnicom Group Inc | Communication Services | -12 |
ON | ON Semiconductor Corp | Information Technology | -1 |
OKE | ONEOK Inc | Energy | -28.9 |
ORCL | Oracle Corp | Information Technology | 3.3 |
OTIS | Otis Worldwide Corp | Industrials | 4.9 |
OC | Owens Corning | Industrials | 16.2 |
PCG | PG&E Corp | Utilities | -4.4 |
PCAR | PACCAR Inc | Industrials | 6.5 |
PANW | Palo Alto Networks Inc | Information Technology | -0.4 |
PH | Parker-Hannifin Corp | Industrials | 5.4 |
PE | Parsley Energy Inc | Energy | -22.1 |
PDCO | Patterson Cos Inc | Health Care | 0.6 |
MRNA | Moderna Inc | Health Care | -0.2 |
TAP | Molson Coors Beverage Co | Consumer Staples | -11.8 |
MDLZ | Mondelez International Inc | Consumer Staples | 3.9 |
MDB | MongoDB Inc | Information Technology | -7.3 |
is this your selection? scroll down, if so...
Williams-Sonoma Inc | WSM
i3PO's 3-Step Process
Scroll down to get started...
Step 1 of 3: Fundamentals
i3PO's process: fundamentals x valuation = risk/reward
Why important: The path of fundamentals is the single-most important driver of returns over time: Stocks or indices where fundamentals are improving/growing, tend to go up...and vice versa.
How to use this section: Go through each question in order. 1A-1D help you understand the financial trends and issues. 1E is a framework to help you think about how the business may evolve.
Williams-Sonoma Inc | WSM
data as of 9/25/2020 | earnings to be released on 11/20/2020
1A. First, understand the business.
Williams-Sonoma, Inc. retails cooking and serving equipment, home furnishings, and home accessories through retail stores, mail order catalogs, and e-commerce.
Sector | Group | Industry |
|---|---|---|
Consumer Discretionary | Retailing | Specialty Retail |
1B. Understand the financials. What has driven earnings? What is expected to drive earnings from here?
Key Financial Data (in millions, except EPS data)
(LTM=last 12 mth, -2LTM= 12 mths before, NTM=consensus forecast | LQ=last quarter, NQ=next quarter)
Last 12 months (LTM)
n/a
Next 12 months (NTM)
n/a
1C. Evaluate the quality of earnings. Earnings should be a proxy for cash flow, the ultimate goal, over time.
CASH FLOW: By adding up recent quarters, I see that the company generated positive cash flow of 917 million vs net income of 763 million.This is GREAT. The business model seems to be driving more cash flow compared to net income.
1D. Understand how the business is financed. How much risk is being taken with debt?
Market Capitalization | + Total Debt | + Pref Equity & MI | - Cash & Equivalents | = Enterprise Value |
|---|---|---|---|---|
6,749 | 2,089 | 0 | 948 | 7,890 |
LEVERAGE: Note that net debt to EBITDA was 1.3x for the last year, which is at the HIGH-END for the past few years. Management has a bit of debt on the company. This still looks conservative for most businesses, depending on the volatility in the business.
1E. Analyze how fundamentals may evolved using i3PO's 2x2 framework.
Williams-Sonoma Inc | WSM
Here are the last 12 months (LTM) and next 12 months (NTM) consensus expectations mapped onto i3PO's 2x2 framework. Review how consensus expects businesses in the index to evolve, how those expectations have changed recently and think about where your views agree or disagree.
Below are some links to get started with your own research:
-
Company: Investor relations will have latest earnings releases & webcasts (see link above)
-
SEC filings: Understand the company's strategy and risks (click here for SEC, here for quick guide video)
-
News: Review latest company news from sites such as Yahoo finance, Google finance or Bloomberg.
Revenue: Quadrant progression & consensus change
LTM
BULL-ish
Revenue has GROWN at a WORSENING rate (3.6% vs 6.4%)
NTM
BULL
Revenue is expected to GROW at a IMPROVING rate (4.9% vs 3.6%)
Over the last 60 days, consensus expectations for NTM revenue have gone from 5,988 to 6,309, which is a 5.4% change.
EBITDA: Quadrant progression & consensus change
LTM
BULL-ish
EBITDA has GROWN at a WORSENING rate (13.2% vs 20.0%)
NTM
BEAR
EBITDA is expected to DECLINE at a WORSENING rate (-7.6% vs 13.2%)
Over the last 60 days, consensus expectations for NTM EBITDA have gone from 694 to 830, which is a 19.6% change.
EPS: Quadrant progression & consensus change
LTM
BULL
EPS has GROWN at a IMPROVING rate (22.3% vs 14.3%)
NTM
BULL-ish
EPS is expected to GROW at a WORSENING rate (11.9% vs 22.3%)
Over the last 60 days, consensus expectations for NTM EPS have gone from 4.68 to 6.10, which is a 30.0% change.
Step 2 of 3: Valuation
i3PO's process: fundamentals x valuation = risk/reward
Why important: To forecast the direction of the stock, correctly anticipating fundamentals is just one component. You also have to anticipate how the market will value those fundamentals.
How to use this section: Go through each of the questions below to understand how the market is valuing the company which can then help inform how you anticipate it will be valued in the future.
Williams-Sonoma Inc | WSM
data as of 9/25/2020 | earnings to be released on 11/20/2020
2A. How has the stock done recently?
Stock Price | Return 12 mth | vs S&P 500 (12m) | vs S&P 500 (3m) |
|---|---|---|---|
86.75 | 32.3% | 21.4% | -1.6% |
OBSERVATION: The stock has been a LAGGARD, UNDERPERFORMING the market by -2%.
IMPLICATIONS/QUESTIONS: Stocks are impacted by the overall economy, sector news and company-specific performance. Ensure you understand what has driven the recent move.
2B. What valuation multiple is the market applying to the stock?
P/E
price-to earnings
EV/EBITDA
enterprise value to ebitda
EV/Sales
enterprise value to sales
P/BV
price to book value
Reference
S&P 500 P/E multiple
multiple
z-score
14.2x
-0.7
7.9x
-0.3
1.3x
0.5
5.1x
0.5
22.2x
0.8
In terms of valuation, the stock currently trades at 1.25x sales. This is 0.5 standard deviations from the recent trend, a slight signal that the market is a bit more BULLISH on future trends. Note: as a reference, the S&P 500 P/E multiple is trading at 0.8 standard deviations from the average of the last year.
The market is valuing the company in a bit more bulllish way. This is nothing that abnormal but it makes sense to monitor how this trends from here. Keep in mind this is just one valuation methodology so take a look at the others as well.
2C. Have sector rotations helped or hurt recently?
The company is part of the CONSUMER DISCRETIONARY sector, which has been in the WEAKENING quadrant relative to other sectors, which means relative returns are positive BUT momentum is slowing.
Step 3 of 3: Risk/Reward
i3PO's process: fundamentals x valuation = risk/reward
Why important: Ultimately, you want to have a good view of the risk of losing money vs the reward of making it. i3PO's process culminates with calculations on risk and reward, upside and downside, so you can make better decisions.
How to use this section: Follow the steps to evaluate risk and reward. First, I'll help you by framing a bull and bear case and reviewing market signals. Then, we can work together on your own case with your assumptions.
Williams-Sonoma Inc | WSM
data as of 9/25/2020 | earnings to be released on 11/20/2020
3A. Review market signals that may challenge or confirm your views.
Market signal: Short interest (how many believe downside to the stock price from here?)
At 9.1%, there is A BIT of short interest. Note that this level has become more BULLISH as the current level is -0.6 standard deviations from the recent past.
Questions you should ask are (1) is the level of short interest aligned to my view and (2) is the trend agreeing, or disagreeing, with me? Short interest is simply another data point to consider. If there are lots of people disagreeing with you, you should take some time to ensure you understand why they are wrong.
Market signal: Options (are options prices indicating bullish or bearish views?)
The cost of put vs call options is now -0.6 standard deviations from the recent trend. This is not that out of the ordinary so there is not much of a signal here.
Note that options prices can change a lot in a short amount of time. Stay informed by checking back often.
Market signal: Insider buying/selling (what are insiders actions telling you?)
Insiders have to report their buying and selling. It is important to know that insiders can buy and sell for all sorts of reasons, but it can help understand what they are really thinking. For example, a big open market purchase after a stock is down is a signal that management believes in the upside from here. It is important to know if it is part of an options plan (less of a signal) or an open market buy/sell (more of a signal).
See this website for a free compilation (type ticker in top right box): https://www.insidertracking.com/
3B. Evaluate your base case scenario.
Up until now, you have been reviewing information i3PO provides. Now you can begin to integrate your own thinking to evaluate risk and reward. i3PO has gathered relevant information below. Input your assumptions on fundamentals and valuation in the yellow boxes to get started. After seeing the results, i3PO can give you feedback on your assumptions, if desired.
Below is just one methodology, price-to-earnings (P/E). Click here for others (ev/ebitda, ev/sales, p/bv, p/e).
vs LTM
vs NTM
Price-to-Earnings (P/E) Analysis
Williams-Sonoma Inc | WSM
data as of 9/25/2020 | earnings to be released on 11/20/2020
Input Your Assumptions
Enter EPS forecast (NTM)
x
Growth % past NTM
=
EPS for multiple
Data and Commentary
Compare your forecast
Amount
% Diff
Enter your next 12 month EPS forecast (NTM) and then growth for NTM from there. Why growth past NTM? Given we are forecasting a 12 month return and are using forward multiples, your NTM forecast will have happened in 12 months and the market will be focused on growth from there.
x
Valuation multiple
=
Implied stock price
Multiple
Z-Score
Current
You
S&P 500 P/E
Compare your forecast to the current multiple. Also, take note of the z-score to ensure you understand how different your forecast is from the recent range.
work in process!
/
Enter current stock price
=
% up, downside
Stock price
Note our stock prices are on a delay as of the date at top of this box. To get current prices, lookup here.
Enter dividend/share
=
% additional return
Amount
% Diff
vs LTM
vs NTM
Enter dividends to be received. Typically, LTM dividends are repeated but not always so check NTM consensus expectations.
=
% total return
i3PO will take a look at your assumptions and give you feedback. This can be a helpful check as if you were testing your assumptions with a peer or co-worker. Click below.
Hello, as I look through your inputs here are my thoughts.
FYI, the S&P 500 is currently trading on a price-to-earnings ratio of 0.8 standard deviations from its past one year average. Keep this in mind as you evaluate your assumptions as company valuations are based partially on their prospects but also on the market as a whole.
---
As a reminder, my goal is to highlight what I see to help you think more effectively - nothing more, nothing less.
Have a good day.
-
3C. Analyze additional scenarios: base, high and low cases. Calculate expected return.
The benefits of developing multiple cases for a stock are that it (a) ensures you are thinking through both risk and reward and (b) helps keep your thinking flexible versus focusing on just one possible scenario. Go back to step 3A and evaluate other scenarios, such as high or low cases different from your base case. Input results here, evaluate the probability of each case and see the expected return taking into account all scenarios.
Probability-adjusted expected return
High
Forecast
stock price
/
Current
stock price
Base
Low
work in process!
=
Implied
% return
=
Dividend
/share
Dividend
yield
=
Total return
x
Assigned probability
Expected Return
=
Probability-adjusted return*
Error sum cannot be more than 100% >>>