WSO Stock Analysis: Watsco | NYSE
Industrial Distribution | NYSE, USA | Market Cap: 11.660m USD | 12M Return: -24% | US9426222009 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 149M
EPS Trend: -87.1%
Qual. Beats: -1
Rev. Trend: -5.4%
Qual. Beats: 0
Warnings
Tailwinds
No distinct edge detected
Seasonality 11.7 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Watsco, Inc. (NYSE: WSO) is a distributor of air conditioning, heating, and refrigeration (HVAC/R) equipment, parts, and supplies, operating across the United States, Canada, Latin America, and the Caribbean. The company serves contractors and dealers in both the replacement and new construction markets for residential and light commercial HVAC/R systems, offering a broad product range that includes ducted and ductless air conditioners, furnaces, replacement components, and ancillary supplies such as thermostats, refrigerants, ductwork, and plumbing products.
The HVAC/R distribution industry is highly fragmented, where scale, inventory breadth, and logistics capabilities serve as key competitive advantages. Replacement demand typically accounts for the majority of industry volume and tends to be more resilient than new construction, supported by aging installed equipment and ongoing service needs. Founded in 1956 and headquartered in Miami, Florida, Watsco is classified as a large-cap industrial company within the GICS Trading Companies & Distributors sub-industry, and has been publicly traded since its 1984 IPO.
- EPA HFC phaseout fuels HVAC replacement demand
- Housing weakness pressures new construction HVAC orders
- Carrier partnership anchors dominant U.S. distribution share
| Net Income: 475.7m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.14 > 0.02 and ΔFCF/TA 5.39 > 1.0 |
| NWC/Revenue: 32.60% < 20% (prev 29.69%; Δ 2.91% < -1%) |
| CFO/TA 0.14 > 3% & CFO 733.3m > Net Income 475.7m |
| Net Debt (71.1m) to EBITDA (748.4m): 0.09 < 3 |
| Current Ratio: 3.20 > 1.5 & < 3 |
| Outstanding Shares: last quarter (38.1m) vs 12m ago 0.54% < -2% |
| Gross Margin: 27.87% > 18% (prev 27.54%; Δ 0.33% > 0.5%) |
| Asset Turnover: 148.4% > 50% (prev 158.7%; Δ -10.31% > 0%) |
| Interest Coverage Ratio: 25.37 > 6 (EBIT TTM 704.4m / Interest Expense TTM 27.8m) |
| A: 0.47 (Total Current Assets 3.45b - Total Current Liabilities 1.08b) / Total Assets 5.08b |
| B: 0.26 (Retained Earnings 1.31b / Total Assets 5.08b) |
| C: 0.14 (EBIT TTM 704.4m / Avg Total Assets 4.91b) |
| D: 1.86 (Book Value of Equity 2.99b / Total Liabilities 1.61b) |
| Altman-Z'' = 6.82 = AAA |
| DSRI: 1.08 (Receivables 1.06b/1.02b, Revenue 7.28b/7.51b) |
| GMI: 0.99 (GM 27.54% / 27.87%) |
| AQI: 1.05 (AQ_t 0.19 / AQ_t-1 0.18) |
| SGI: 0.97 (Revenue 7.28b / 7.51b) |
| TATA: -0.05 (NI 475.7m - CFO 733.3m) / TA 5.08b) |
| Beneish M = -2.97 (Cap -4..+1) = A |
As of October 12, 2026, the stock is trading at USD 279.90 with a total of 554,724 shares traded. Over the past week, the price has changed by -5.91%, over one month by -9.64%, over three months by -25.26% and over the past year by -24.01%.
Current recommended Stop Loss: 267.00 (which is 4.6% or 1.4 ATR below the current price).
Watsco has received a consensus analysts rating of 3.21. Therefore, it is recommended to hold WSO.
- StrongBuy: 2
- Buy: 1
- Hold: 10
- Sell: 0
- StrongSell: 1
| Analysts Target Price | 375.9 | 34.3% |
P/E Trailing = 24.2202
P/E Forward = 21.322
P/S = 1.6008
P/B = 4.3288
P/EG = 1.2025
Revenue TTM = 7.28b USD
EBIT TTM = 704.4m USD
EBITDA TTM = 748.4m USD
Long Term Debt = 11.0m USD (from longTermDebtTotal, last fiscal year)
Short Term Debt = 119.7m USD (from shortTermDebt, last quarter)
Debt = 535.3m USD (from shortLongTermDebtTotal, last quarter) (leases 535.3m already included)
Net Debt = 71.1m USD (calculated: Debt 535.3m - CCE 464.2m)
Enterprise Value = 11.7b USD (11.7b + Debt 535.3m - CCE 464.2m)
Interest Coverage Ratio = 25.37 (Ebit TTM 704.4m / Interest Expense TTM 27.8m)
EV/FCF = 16.81x (Enterprise Value 11.7b / FCF TTM 698.0m)
FCF Yield = 5.95% (FCF TTM 698.0m / Enterprise Value 11.7b)
FCF Margin = 9.58% (FCF TTM 698.0m / Revenue TTM 7.28b)
Net Margin = 6.53% (Net Income TTM 475.7m / Revenue TTM 7.28b)
Gross Margin = 27.87% ((Revenue TTM 7.28b - Cost of Revenue TTM 5.25b) / Revenue TTM)
Gross Margin QoQ = 27.50% (prev 27.89%)
Tobins Q-Ratio = 2.31 (Enterprise Value 11.7b / Total Assets 5.08b)
Interest Expense / Debt = 5.19% (Interest Expense 27.8m / Debt 535.3m)
Taxrate = 20.42% (143.9m / 704.4m)
NOPAT = 560.5m (EBIT 704.4m * (1 - 20.42%))
Current Ratio = 3.20 (Total Current Assets 3.45b / Total Current Liabilities 1.08b)
Debt / Equity = 0.18 (Debt 535.3m / totalStockholderEquity, last quarter 2.99b)
Debt / EBITDA = 0.09 (Net Debt 71.1m / EBITDA 748.4m)
Debt / FCF = 0.10 (Net Debt 71.1m / FCF TTM 698.0m)
Total Stockholder Equity = 2.84b (last 4 quarters mean from totalStockholderEquity)
RoA = 9.69% (Net Income 475.7m / Total Assets 5.08b)
RoE = 16.76% (Net Income TTM 475.7m / Total Stockholder Equity 2.84b)
RoCE = 24.72% (EBIT 704.4m / Capital Employed (Equity 2.84b + L.T.Debt 11.0m))
RoIC = 14.91% (NOPAT 560.5m / Invested Capital 3.76b)
WACC = 9.16% (E(11.7b)/V(12.2b) * Re(9.39%) + D(535.3m)/V(12.2b) * Rd(5.19%) * (1-Tc(0.20)))
Discount Rate = 9.39% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 84.34 | Cagr: 1.29%
[DCF] Terminal Value 75.39% ; FCFF base≈576.6m ; Y1≈660.9m ; Y5≈972.7m
[DCF] Fair Price = 358.0 (EV 12.8b - Net Debt 71.1m = Equity 12.7b / Shares 35.6m; r=9.16% [WACC]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: -87.14 | EPS CAGR: -6.40% | SUE: -1.51 | # QB: -1
Revenue Correlation: -5.36 | Revenue CAGR: -0.11% | SUE: -0.48 | # QB: 0
EPS current Quarter (2026-09-30): EPS=4.12 | Chg30d=+0.00% | Revisions=-29% | Analysts=10
EPS current Year (2026-12-31): EPS=12.19 | Chg30d=+0.09% | Revisions=-57% | GrowthEPS=-0.5% | GrowthRev=+4.3%
EPS next Year (2027-12-31): EPS=13.23 | Chg30d=-0.04% | Revisions=-57% | GrowthEPS=+8.5% | GrowthRev=+5.4%
[Analyst] Revisions Ratio: -67% (up=1, down=11)