WSO Stock Analysis: Watsco | NYSE
Industrial Distribution | NYSE, USA | Market Cap: 13.596m USD | 12M Return: -24.3% | US9426222009 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 164M
EPS Trend: -87.1%
Qual. Beats: -1
Rev. Trend: -5.4%
Qual. Beats: 0
Warnings
Tailwinds
No distinct edge detected
Seasonality 11.6 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. is a leading distributor of air conditioning, heating, and refrigeration (HVAC/R) equipment, parts, and supplies, operating primarily in the United States, Canada, Latin America, and the Caribbean. The company sells a broad product range, including residential and commercial air conditioning units, furnaces, compressors, motors, thermostats, refrigerants, ductwork, and plumbing/bathroom supplies. Its customers are largely independent contractors and dealers serving both the replacement and new construction markets for residential and light commercial HVAC/R systems. Watsco was incorporated in 1956 and is headquartered in Miami, Florida.
As a large-cap company in the Industrials sector (GICS sub-industry: Trading Companies & Distributors), Watsco operates a distribution-focused business model that relies on a wide network of contractor and dealer relationships rather than direct-to-consumer sales. The HVAC distribution industry benefits from a large installed base of equipment that requires ongoing replacement, parts, and maintenance, which generally provides a recurring revenue stream insulated from the cyclicality of new construction activity.
- EPA refrigerant phase-down accelerates HVAC equipment replacement demand
- Housing slowdown pressures new construction HVAC orders
- Margin compression persists amid competitive pricing and supplier cost increases
- Acquisition pipeline expands market share across distribution footprint
| Net Income: 475.7m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.13 > 0.02 and ΔFCF/TA 4.88 > 1.0 |
| NWC/Revenue: 32.60% < 20% (prev 29.69%; Δ 2.91% < -1%) |
| CFO/TA 0.14 > 3% & CFO 714.4m > Net Income 475.7m |
| Net Debt (548.2m) to EBITDA (722.9m): 0.76 < 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: 24.46 > 6 (EBIT TTM 679.1m / 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 679.1m / Avg Total Assets 4.91b) |
| D: 1.86 (Book Value of Equity 2.99b / Total Liabilities 1.61b) |
| Altman-Z'' = 6.78 = 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 714.4m) / TA 5.08b) |
| Beneish M = -2.97 (Cap -4..+1) = A |
As of August 13, 2026, the stock is trading at USD 309.41 with a total of 764,180 shares traded. Over the past week, the price has changed by -7.12%, over one month by -20.74%, over three months by -25.19% and over the past year by -24.33%.
Current recommended Stop Loss: 289.90 (which is 6.3% or 1.4 ATR below the current price).
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 | 382.2 | 23.5% |
P/E Trailing = 28.2378
P/E Forward = 25.5754
P/S = 1.8667
P/B = 4.5405
P/EG = 1.4402
Revenue TTM = 7.28b USD
EBIT TTM = 679.1m USD
EBITDA TTM = 722.9m USD
Long Term Debt = 11.0m USD (from longTermDebtTotal, last fiscal year)
Short Term Debt = 119.7m USD (from shortTermDebt, last quarter)
Debt = 1.01b USD (from shortLongTermDebtTotal, last quarter) + Leases 486.2m
Net Debt = 548.2m USD (calculated: Debt 1.01b - CCE 464.2m)
Enterprise Value = 14.1b USD (13.6b + Debt 1.01b - CCE 464.2m)
Interest Coverage Ratio = 24.46 (Ebit TTM 679.1m / Interest Expense TTM 27.8m)
EV/FCF = 21.04x (Enterprise Value 14.1b / FCF TTM 672.2m)
FCF Yield = 4.75% (FCF TTM 672.2m / Enterprise Value 14.1b)
FCF Margin = 9.23% (FCF TTM 672.2m / 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 = 2.78 (Enterprise Value 14.1b / Total Assets 5.08b)
Interest Expense / Debt = 2.74% (Interest Expense 27.8m / Debt 1.01b)
Taxrate = 20.42% (143.9m / 704.4m)
NOPAT = 540.4m (EBIT 679.1m * (1 - 20.42%))
Current Ratio = 3.20 (Total Current Assets 3.45b / Total Current Liabilities 1.08b)
Debt / Equity = 0.34 (Debt 1.01b / totalStockholderEquity, last quarter 2.99b)
Debt / EBITDA = 0.76 (Net Debt 548.2m / EBITDA 722.9m)
Debt / FCF = 0.82 (Net Debt 548.2m / FCF TTM 672.2m)
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 = 23.84% (EBIT 679.1m / Capital Employed (Equity 2.84b + L.T.Debt 11.0m))
RoIC = 14.37% (NOPAT 540.4m / Invested Capital 3.76b)
WACC = 8.98% (E(13.6b)/V(14.6b) * Re(9.49%) + D(1.01b)/V(14.6b) * Rd(2.74%) * (1-Tc(0.20)))
Discount Rate = 9.49% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 84.34 | Cagr: 1.29%
[DCF] Terminal Value 75.94% ; FCFF base≈561.0m ; Y1≈643.1m ; Y5≈946.5m
[DCF] Fair Price = 345.2 (EV 12.8b - Net Debt 548.2m = Equity 12.3b / Shares 35.5m; r=8.98% [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=4.10 | Chg30d=-3.90% | Revisions=+40% | Analysts=9
EPS current Year (2026-12-31): EPS=12.17 | Chg30d=-3.60% | Revisions=+25% | GrowthEPS=-0.6% | GrowthRev=+4.3%
EPS next Year (2027-12-31): EPS=13.26 | Chg30d=-3.14% | Revisions=+25% | GrowthEPS=+9.0% | GrowthRev=+5.4%
[Analyst] Revisions Ratio: +57% (up=4, down=0)