WSO
Watsco Inc
$374.04
▲ 0.9%Updated Today 3:42 PM ET
WSO at a glance — five pillars scored 0–100 from real filed financials.
Overall: Weak · 41/100. A wider, greener shape means more pillars look healthy. Dividends scores 0 when a company pays none — that is a choice, not a flaw.
▼ Down 11.9% over the last 12 months
Market Cap
$15.61B
P/E
32.51x
Forward P/E (est.)
34.9x
ROE
17.8%
Revenue Growth
-4.5%
EPS Growth
-6.8%
Profit Margin
6.8%
FCF Yield
5.0%
Debt / Equity
0.01x
ROIC
19.0%
Interest Coverage
129.86x
Current Ratio
3.34x
Dividend Yield
3.2%
Implied Growth (rev. DCF)
5.4%
Rating Score
41/100
Watsco Inc (WSO) is a large-cap company in the Trading Companies & Distributors industry, part of the Industrials sector of the S&P 500, with a market value around $15.61B.
In its latest reported year it generated about $7.24B in revenue and $496.99M in net profit.
Our model rates WSO Weak (41/100) on growth, profitability, financial health, and valuation. The summary below is built from its filed financials and current ratios and refreshes automatically.
Evidence of durable competitive advantage in the filed financials (10 years of history).
Some durable-advantage evidence, but not across the board — dig into which ingredient is weak and whether it's cyclical or structural.
27.4% average over the last 3 years
±1.5 pts around 25.9% across 10 years
grew in 8 of the last 9 year-over-year periods
positive in 10 of 10 years
19.0% latest fiscal year
A moat can't be proven by numbers alone — this scores the evidence a durable advantage leaves behind (pricing power, consistency, returns on capital), computed the same way for every stock. Pair it with the business overview before concluding anything.
Technical analysis reads price and volume to judge momentum and timing. It complements the fundamentals above — it does not replace them. Here is what WSO's chart says today, with each tool explained.
Trend — moving averages. A moving average is the average closing price over a window, which smooths out daily noise. WSO trades near $374.04, below its 50-day average ($400.41) and 200-day average ($382.80). Price below both averages is a downtrend — momentum is against buyers for now.
Momentum — RSI. The Relative Strength Index runs 0–100 and measures how strong recent gains are versus losses. Above 70 is "overbought", below 30 "oversold". At 63 it is in neutral territory — neither stretched nor washed out.
MACD. MACD compares two moving averages to flag shifts in momentum. Its histogram is currently positive — short-term momentum is improving.
Volatility — ATR. Average True Range is the typical daily move. WSO's is $11.79 (~3.2% of price), so swings of about that size each day are normal — handy for setting a stop that isn't too tight.
Support & resistance. Over the last month WSO found buyers near $365.61 (support) and sellers near $420.90 (resistance); its 52-week range is $323.05–$494.94. A decisive break beyond either edge often marks the next move.
Volume. The latest session traded 0.3× the 20-day average — lighter than usual, so the move carries less conviction. Rising volume on up-days suggests real buying; on down-days, real selling.
Educational information to help you read a chart — not a recommendation or a forecast. It updates daily as the price and indicators change.
4Y CAGR
3.6%
Revenue moved from $4.22B in 2016 to $7.24B in 2025, a 6.2% compound annual growth rate. The most recent year declined 4.5% year over year. Shrinking revenue is worth a closer look — is it cyclical or structural?
Gross Margin
28.0%
Operating Margin
10.0%
Net Margin
6.9%
ROE
17.8%
Watsco Inc keeps about 6.8% of each sales dollar as net profit, with a 28.0% gross margin and 10.0% operating margin. Return on equity is 17.8% and return on invested capital about 19.0%. Margins are moderate — typical of a competitive but profitable business.
Total Debt
$219.85M
Net Debt
-$172.83M
Net cash position
Net Debt / EBITDA
-0.24x
Debt / Equity
0.01x
Leverage: debt-to-equity is 0.0x, and operating profit covers interest about 129.9x, with a current ratio of 3.3x. That is a conservative balance sheet — a cushion in downturns. It carries roughly $219.85M of total debt against $392.68M of cash.
Operating CF
$569.61M
Free Cash Flow
$535.06M
FCF Margin
7.4%
In the latest year Watsco Inc produced about $569.61M of operating cash flow and $535.06M of free cash flow after capital spending. That is a free-cash-flow yield of about 5.0% on today's price. Strong cash generation funds dividends, buybacks, and reinvestment.
Can the payout survive a bad year? Scored from filed cash flow, earnings coverage, and the raise/cut record.
The dividend is being paid, but coverage or consistency is thinner than an income investor should rely on without a closer look.
Dividend yield
3.2%
Per share (latest FY)
$11.70
Total paid (latest FY)
$473.76M
History on record
10 years
dividend uses 89% of free cash flow
95% of net income paid out
total dividends increased 9 years in a row
no cuts in the last 10 years on record
Coverage uses the latest fiscal year as filed with the SEC; the streak counts total dollars paid (per-share figures can carry split artifacts). Educational information, not income advice.
P/E
32.51x
P/S
2.23x
P/B
4.92x
EV / EBITDA
20.2x
WSO trades at 32.5x trailing earnings (about 34.9x on estimated forward earnings), 2.2x sales, and 4.9x book value. Reverse-engineering today's price implies the market expects roughly 5.4% long-term free-cash-flow growth. That is a premium multiple that needs growth to justify it.
A two-stage discounted cash flow on real SEC-filed free cash flow — the intrinsic-value anchor professional analysts triangulate from.
DCF fair value / share
—
Current price
$374.04
Starting FCF (latest 10-K)
$535.06M
Growth, years 1–5
-4.5%
Fade to terminal, years 6–10
2.5%
Discount rate
9.0%
Cash flows grow at the stage-1 rate (trailing revenue growth, capped at 20%) for five years, fade to 2.5% by year 10, and continue at that rate forever (Gordon terminal value), all discounted at 9.0%. Small changes in assumptions move the result a lot — treat this as one reference point, not a target price. Educational only, not investment advice.
Where WSO sits versus its Industrials sector peers in the S&P 500.
Bands show the middle half (25th–75th percentile) of the 144 Industrials companies in the S&P 500 — the peer-relative anchor professional comps analysis uses. Context only — not investment advice.
How WSO stacks up against its Industrials peers — valuation, profitability, and growth versus the sector median.
In the Industrials sector (273 S&P 500 companies), WSO ranks #112 of 273 by our overall rating. It trades at roughly in line versus the sector on earnings (32.5x P/E vs. 30.7x median) with a lower return on equity (17.8% vs. 18.1%) and slower revenue growth (-4.5% vs. 6.0%).
P/E vs sector
32.5x
median 30.7x
ROE vs sector
17.8%
median 18.1%
Growth vs sector
-4.5%
median 6.0%
Sector rank
#112
of 273 by rating
Valuation vs. quality map
The sweet spot is upper-left: more profitable (higher ROE) for a lower P/E. Dashed lines mark the sector median.
Peers are the closest Industrials companies by sub-industry and size. Sector median is across all 273 S&P 500 names in the sector. Educational, not a recommendation.
Project revenue → earnings → price. Edit the assumptions to build your own case.
2030 price target (Base Case)
$0.00 – $0.00
vs. $374.04 today · expected CAGR -6% – 4%
| Metric | 2026 | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|
| Revenue | $7.46B | $7.68B | $7.91B | $8.15B | $8.39B |
| Net income | $521.95M | $537.61M | $553.74M | $570.35M | $587.46M |
| EPS | $12.51 | $12.89 | $13.27 | $13.67 | $14.08 |
| Share price (low) | $250.21 | $257.72 | $265.45 | $273.41 | $281.62 |
| Share price (high) | $412.85 | $425.24 | $437.99 | $451.13 | $464.67 |
| CAGR (low–high) | -33% / 10% | -17% / 7% | -11% / 5% | -8% / 5% | -6% / 4% |
Educational model on sample fundamentals — not a forecast or investment advice. Outputs are only as good as your assumptions.
The case for WSO:
- Strong return on equity (17.8%) shows capital is put to work well.
- Healthy free-cash-flow yield (~5.0%) funds buybacks and dividends.
- A conservative balance sheet (debt/equity 0.0x) lowers risk.
- Pays a 3.2% dividend on top of any price gains.
The case against WSO:
- Revenue growth is slow/negative (-4.5%), limiting the upside engine.
- Our model's overall read is Weak (41/100).
Valuation risk — at 32.5x earnings, disappointing results could compress the multiple.
Growth risk — sluggish revenue (-4.5%) leaves little margin for execution missteps.
Market risk — sector rotation, the economic cycle, and broad sentiment move the stock regardless of fundamentals.
On balance, the fundamentals screen weakly: Watsco Inc is a large-cap industrials business with shrinking revenue, with modest profitability, and a sound balance sheet. It trades at 32.5x earnings, which our model scores Weak (41/100). Weigh this against your own goals and time horizon — this is educational information, not a recommendation.
Analyst Ratings
What 23 Wall Street analysts covering WSO recommend (July 2026). Consensus is a useful sanity check — not a substitute for your own homework.
Analysts have turned more cautious over the last three months (-16 pts of buy ratings).
Latest SEC Filings
WSO's most recent filings, straight from SEC EDGAR. Annual and quarterly reports are the deep dives; 8-Ks flag material events the moment they happen.
In the Idea Lab
WSO — frequently asked questions
Is WSO a good stock to buy?
We don't give buy or sell advice. Our model rates Watsco Inc Weak (41/100) based on its growth, profitability, financial health, and valuation — use that as a research starting point and make your own decision.
What is WSO's rating on The Stocks School?
Watsco Inc currently scores 41/100 (Weak) on our transparent model, which weighs real fundamentals: growth, margins, returns on capital, balance-sheet strength, and valuation.
How our ratings work →Where does WSO's data come from?
Live price data plus real fundamentals and 5-year financials pulled directly from Watsco Inc's SEC filings — refreshed automatically, not hand-entered.
How is the 5-year projection for WSO calculated?
It's a scenario model: it grows revenue at an assumed rate, applies a profit margin and a valuation multiple, and shows the resulting share-price range. The assumptions are yours to change — it's a tool for thinking, not a prediction.
Is this WSO analysis financial advice?
No. Everything on this page is educational research, not financial advice or a recommendation to buy or sell WSO. Always do your own research and consider a licensed professional.
Data notice. Fundamentals and financial statements are sourced from company filings (SEC EDGAR) and market-data providers; prices and market caps refresh on trading days and may be delayed. Ratings, projections, technical signals, and written summaries are model- or rule-generated for education and may simplify or lag the latest filings.
Not advice. Nothing on this page is investment advice or a recommendation to buy, hold, or sell any security. Do your own research and consult a licensed financial professional before investing.