WSOWatsco demonstrates strong fundamentals with consistent profitability and a healthy balance sheet. The company benefits from essential industry demand. While valuation metrics are moderate, the reliable dividend and stable business model make it an attractive long-term holding, despite some short-term technical headwinds. Thematic exposure to HVAC and refrigeration is stable rather than high-growth.
Watsco operates in the HVAC and refrigeration distribution sector, which is considered relatively stable, driven by essential needs like climate control and food preservation. While not a high-growth thematic area, it offers resilience.
Watsco exhibits strong financial health, marked by consistent revenue, healthy profit margins, and robust free cash flow generation. Its balance sheet is solid with manageable debt levels. The company also demonstrates a commitment to shareholder returns through regular dividend payments.
The stock's recent performance shows a slight decline. While it has experienced positive short-term momentum over 1M and 5D, the longer-term performance (6M, 1Y) is flat to negative. Technical indicators on intraday and daily charts suggest a mixed to slightly bearish sentiment, with several moving averages indicating 'Sell'.
| Factor | Score |
|---|---|
| Essential Goods & Services | 75 |
| Replacement and Upgrade Cycles | 70 |
| Energy Efficiency & Sustainability | 60 |
| Geographic Diversification | 65 |
| Competitive Landscape | 60 |
| Factor | Score |
|---|---|
| Valuation | 50 |
| Profitability | 75 |
| Growth | 60 |
| Balance Sheet Health | 85 |
| Cash Flow | 90 |
| Dividend Sustainability | 80 |
| Factor | Score |
|---|---|
| Trend Analysis | 40 |
| Momentum | 65 |
| Price Action | 50 |
| Volume Analysis | 60 |
| Intraday Indicators | 55 |
Consistent EPS Performance
The company has demonstrated consistent performance in Earnings Per Share (EPS), with reported EPS often meeting or exceeding analyst estimates, indicating operational reliability.
Reasonable P/E Ratio
The trailing P/E ratio of 37.17 is within a range that could be considered reasonable for a company with Watsco's historical growth and market position, especially when compared to industry peers.
High P/E Ratio Relative to Recent Growth
The P/E ratio of 37.17 appears high given the reported net margins around 7-8.3% and a P/S ratio of 2.1 for 2024, potentially indicating it is trading at a premium.
EPS Misses and Surprises
Recent quarterly earnings reports show instances of missing analyst estimates (e.g., Q2 2025, Q4 2024, Q3 2024), suggesting potential headwinds or challenges in meeting growth expectations.
July 2025
16
Ex-Dividend Date
July 2025
30
Next Earnings Date
H: $5.10
A: $4.84
L: $4.49
H: 2.30B
A: 2.23B
L: 2.18B
July 2025
31
Next Dividend Date
Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies in the United States, Canada, Latin America, and the Caribbean. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. It also offers parts comprising replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies. The company serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. Watsco, Inc. was incorporated in 1956 and is headquartered in Miami, Florida.
468.18 USD
The 39 analysts offering 1 year price forecasts for WSO have a max estimate of 550.00 and a min estimate of 333.00.