(WSO) Watsco - Overview
Sector: Industrials | Industry: Industrial Distribution | Exchange: NYSE (USA) | Market Cap: 15.253m USD | Total Return: -15.1% in 12m
Avg Turnover: 135M
EPS Trend: -87.1%
Qual. Beats: 0
Rev. Trend: 26.9%
Qual. Beats: 0
Warnings
Below Avwap Earnings
Tailwinds
No distinct edge detected
Watsco, Inc. (WSO) is the largest distributor of air conditioning, heating, and refrigeration (HVAC/R) equipment and related parts in North America. Headquartered in Miami, Florida, the company operates a vast distribution network serving residential and light commercial markets across the United States, Canada, Latin America, and the Caribbean.
The business model functions as a critical link between HVAC manufacturers and a fragmented customer base of over 125,000 contractors. Watsco maintains a diverse inventory ranging from full furnace and AC units to specialized components like compressors and thermostats, catering to both the new construction and high-margin replacement markets.
The HVAC distribution sector is characterized by high barriers to entry due to the necessity of localized inventory and technical expertise required to support complex equipment. Examining historical valuation trends on ValueRay can provide further context on the companys market position. Revenue in this industry is traditionally resilient, as repair and replacement cycles for climate control systems are often non-discretionary for property owners.
- Regulatory phase-down of HFC refrigerants increases unit pricing and replacement demand
- Rising average temperatures drive higher seasonal demand for residential HVAC replacement units
- Strategic acquisitions of independent distributors expand market share and geographic density
- Shift toward high-efficiency heat pumps improves revenue mix and hardware margins
- Housing market volatility and high interest rates impact new construction sales volume
| Net Income: 496.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.15 > 0.02 and ΔFCF/TA 4.63 > 1.0 |
| NWC/Revenue: 30.79% < 20% (prev 27.82%; Δ 2.96% < -1%) |
| CFO/TA 0.16 > 3% & CFO 728.4m > Net Income 496.0m |
| Net Debt (-116.5m) to EBITDA (778.4m): -0.15 < 3 |
| Current Ratio: 3.34 > 1.5 & < 3 |
| Outstanding Shares: last quarter (38.0m) vs 12m ago 0.29% < -2% |
| Gross Margin: 28.37% > 18% (prev 0.27%; Δ 2.81k% > 0.5%) |
| Asset Turnover: 159.1% > 50% (prev 170.3%; Δ -11.19% > 0%) |
| Interest Coverage Ratio: 32.47 > 6 (EBITDA TTM 778.4m / Interest Expense TTM 22.6m) |
| A: 0.48 (Total Current Assets 3.18b - Total Current Liabilities 951.9m) / Total Assets 4.65b |
| B: 0.27 (Retained Earnings 1.28b / Total Assets 4.65b) |
| C: 0.16 (EBIT TTM 734.4m / Avg Total Assets 4.55b) |
| D: 0.87 (Book Value of Equity 1.25b / Total Liabilities 1.43b) |
| Altman-Z'' = 6.04 = AAA |
| DSRI: 1.11 (Receivables 839.2m/794.3m, Revenue 7.24b/7.58b) |
| GMI: 0.95 (GM 28.37% / 26.95%) |
| AQI: 0.99 (AQ_t 0.19 / AQ_t-1 0.19) |
| SGI: 0.95 (Revenue 7.24b / 7.58b) |
| TATA: -0.05 (NI 496.0m - CFO 728.4m) / TA 4.65b) |
| Beneish M = -3.07 (Cap -4..+1) = AA |
As of May 30, 2026, the stock is trading at USD 367.10 with a total of 343,492 shares traded.
Over the past week, the price has changed by -2.98%,
over one month by -14.33%,
over three months by -11.33% and
over the past year by -15.10%.
Watsco has received a consensus analysts rating of 3.20. Therefore, it is recommended to hold WSO.
- StrongBuy: 3
- Buy: 0
- Hold: 10
- Sell: 1
- StrongSell: 1
| Analysts Target Price | 424.7 | 15.7% |
P/E Trailing = 30.7769
P/E Forward = 28.49
P/S = 2.1065
P/B = 5.5224
P/EG = 1.4826
Revenue TTM = 7.24b USD
EBIT TTM = 734.4m USD
EBITDA TTM = 778.4m USD
Long Term Debt = 11.0m USD (from longTermDebtTotal, last fiscal year)
Short Term Debt = 117.7m USD (from shortTermDebt, last quarter)
Debt = 476.2m USD (from shortLongTermDebtTotal, last quarter) (leases 486.2m already included)
Net Debt = -116.5m USD (calculated: Debt 476.2m - CCE 592.7m)
Enterprise Value = 15.1b USD (15.3b + Debt 476.2m - CCE 592.7m)
Interest Coverage Ratio = 32.47 (Ebit TTM 734.4m / Interest Expense TTM 22.6m)
EV/FCF = 21.77x (Enterprise Value 15.1b / FCF TTM 695.3m)
FCF Yield = 4.59% (FCF TTM 695.3m / Enterprise Value 15.1b)
FCF Margin = 9.60% (FCF TTM 695.3m / Revenue TTM 7.24b)
Net Margin = 6.85% (Net Income TTM 496.0m / Revenue TTM 7.24b)
Gross Margin = 28.37% ((Revenue TTM 7.24b - Cost of Revenue TTM 5.19b) / Revenue TTM)
Gross Margin QoQ = 27.89% (prev 27.14%)
Tobins Q-Ratio = 3.26 (Enterprise Value 15.1b / Total Assets 4.65b)
Interest Expense / Debt = 4.75% (Interest Expense 22.6m / Debt 476.2m)
Taxrate = 20.32% (23.7m / 116.6m)
NOPAT = 585.2m (EBIT 734.4m * (1 - 20.32%))
Current Ratio = 3.34 (Total Current Assets 3.18b / Total Current Liabilities 951.9m)
Debt / Equity = 0.17 (Debt 476.2m / totalStockholderEquity, last quarter 2.76b)
Debt / EBITDA = -0.15 (Net Debt -116.5m / EBITDA 778.4m)
Debt / FCF = -0.17 (Net Debt -116.5m / FCF TTM 695.3m)
Total Stockholder Equity = 2.78b (last 4 quarters mean from totalStockholderEquity)
RoA = 10.90% (Net Income 496.0m / Total Assets 4.65b)
RoE = 17.84% (Net Income TTM 496.0m / Total Stockholder Equity 2.78b)
RoCE = 26.32% (EBIT 734.4m / Capital Employed (Equity 2.78b + L.T.Debt 11.0m))
RoIC = 17.10% (NOPAT 585.2m / Invested Capital 3.42b)
WACC = 9.22% (E(15.3b)/V(15.7b) * Re(9.39%) + D(476.2m)/V(15.7b) * Rd(4.75%) * (1-Tc(0.20)))
Discount Rate = 9.39% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 59.63 | Cagr: 1.19%
[DCF] Terminal Value 75.20% ; FCFF base≈601.2m ; Y1≈689.1m ; Y5≈1.01b
[DCF] Fair Price = 381.4 (EV 13.2b - Net Debt -116.5m = Equity 13.4b / Shares 35.0m; r=9.22% [WACC]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: -87.14 | EPS CAGR: -6.40% | SUE: 0.65 | # QB: 0
Revenue Correlation: 26.90 | Revenue CAGR: 0.60% | SUE: 0.60 | # QB: 0
EPS current Quarter (2026-06-30): EPS=4.38 | Chg30d=+0.10% | Revisions=-20% | Analysts=6
EPS next Quarter (2026-09-30): EPS=4.28 | Chg30d=-0.57% | Revisions=-11% | Analysts=6
EPS current Year (2026-12-31): EPS=12.83 | Chg30d=+0.86% | Revisions=+11% | GrowthEPS=+4.7% | GrowthRev=+3.2%
EPS next Year (2027-12-31): EPS=14.01 | Chg30d=-1.71% | Revisions=+14% | GrowthEPS=+9.2% | GrowthRev=+4.8%
[Analyst] Revisions Ratio: -20%