WSO Stock Analysis: Watsco | NYSE
Industrial Distribution | NYSE, USA | Market Cap: 15.362m USD | 12M Return: -21.5% | Charts, Fundamentals & Technical Analysis
Avg Turnover: 136M
EPS Trend: -87.1%
Qual. Beats: 1
Rev. Trend: 26.9%
Qual. Beats: 0
Warnings
Tailwinds
No distinct edge detected
Seasonality 10.5 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: 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 (780.7m): -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 26.95%; Δ 1.42% > 0.5%) |
| Asset Turnover: 159.1% > 50% (prev 170.3%; Δ -11.19% > 0%) |
| Interest Coverage Ratio: 26.53 > 6 (EBIT TTM 736.7m / Interest Expense TTM 27.8m) |
| 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 736.7m / Avg Total Assets 4.55b) |
| D: 1.93 (Book Value of Equity 2.76b / Total Liabilities 1.43b) |
| Altman-Z'' = 7.15 = AAA |
| DSRI: 1.11 (Receivables 839.2m/794.3m, Revenue 7.24b/7.58b) |
| GMI: 0.95 (GM 26.95% / 28.37%) |
| 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 = -3.03 (Cap -4..+1) = AA |
As of July 28, 2026, the stock is trading at USD 364.37 with a total of 203,552 shares traded. Over the past week, the price has changed by -1.73%, over one month by -10.50%, over three months by -19.56% and over the past year by -21.53%.
Current recommended Stop Loss: 346.40 (which is 4.9% 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 | 428.7 | 17.7% |
P/E Trailing = 30.3961
P/E Forward = 28.169
P/S = 2.1214
P/B = 5.5289
P/EG = 1.4652
Revenue TTM = 7.24b USD
EBIT TTM = 736.7m USD
EBITDA TTM = 780.7m 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 = 15.2b USD (15.4b + Debt 476.2m - CCE 592.7m)
Interest Coverage Ratio = 26.53 (Ebit TTM 736.7m / Interest Expense TTM 27.8m)
EV/FCF = 21.93x (Enterprise Value 15.2b / FCF TTM 695.2m)
FCF Yield = 4.56% (FCF TTM 695.2m / Enterprise Value 15.2b)
FCF Margin = 9.60% (FCF TTM 695.2m / 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 = 3.28 (Enterprise Value 15.2b / Total Assets 4.65b)
Interest Expense / Debt = 5.83% (Interest Expense 27.8m / Debt 476.2m)
Taxrate = 20.46% (150.7m / 736.7m)
NOPAT = 586.0m (EBIT 736.7m * (1 - 20.46%))
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 780.7m)
Debt / FCF = -0.17 (Net Debt -116.5m / FCF TTM 695.2m)
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 = 26.40% (EBIT 736.7m / Capital Employed (Equity 2.78b + L.T.Debt 11.0m))
RoIC = 16.97% (NOPAT 586.0m / Invested Capital 3.45b)
WACC = 8.98% (E(15.4b)/V(15.8b) * Re(9.11%) + D(476.2m)/V(15.8b) * Rd(5.83%) * (1-Tc(0.20)))
Discount Rate = 9.11% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -13.91 | Cagr: -1.68%
[DCF] Terminal Value 75.97% ; FCFF base≈601.1m ; Y1≈689.1m ; Y5≈1.01b
[DCF] Fair Price = 390.2 (EV 13.7b - Net Debt -116.5m = Equity 13.9b / Shares 35.5m; r=8.98% [WACC]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: -87.14 | EPS CAGR: -6.40% | SUE: 0.93 | # QB: 1
Revenue Correlation: 26.90 | Revenue CAGR: 0.60% | SUE: 0.60 | # QB: 0
EPS current Quarter (2026-06-30): EPS=4.39 | Chg30d=+0.46% | Revisions=+25% | Analysts=7
EPS next Quarter (2026-09-30): EPS=4.31 | Chg30d=+0.37% | Revisions=+25% | Analysts=7
EPS current Year (2026-12-31): EPS=12.71 | Chg30d=+0.27% | Revisions=+12% | GrowthEPS=+3.7% | GrowthRev=+5.4%
EPS next Year (2027-12-31): EPS=13.74 | Chg30d=+0.07% | Revisions=+17% | GrowthEPS=+8.1% | GrowthRev=+5.5%
[Analyst] Revisions Ratio: +31% (up=7, down=3)