Watsco Valuation
| WSO Stock | USD 415.81 0.74 0.18% |
At this time, the company appears to be fairly valued. Watsco Inc maintains a prevalent Real Value of $430.67 per share. The last-minute price of the company is $415.81. Our model calculates the value of Watsco Inc from examining the company fundamentals such as Return On Asset of 0.1, current valuation of 17.06 B, and Profit Margin of 0.07 % as well as analyzing its technical indicators and probability of bankruptcy. Key fundamental drivers impacting Watsco's valuation include:
Price Book 6.161 | Enterprise Value | Enterprise Value Ebitda 22.1689 | Price Sales 2.3453 | Forward PE 27.933 |
Fairly Valued
Today
Please note that Watsco's price fluctuation is very steady at this time. Calculation of the real value of Watsco Inc is based on 3 months time horizon. Increasing Watsco's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Since Watsco is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Watsco Stock. However, Watsco's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 415.81 | Real 430.67 | Target 395.58 | Hype 414.49 |
The intrinsic value of Watsco's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Watsco's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Watsco Inc helps investors to forecast how Watsco stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Watsco more accurately as focusing exclusively on Watsco's fundamentals will not take into account other important factors: Traditionally, analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Watsco's intrinsic value based on its ongoing forecasts of Watsco's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Watsco's closest peers.
Watsco Cash |
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Watsco Total Value Analysis
Watsco Inc is at this time projected to have company total value of 17.06 B with market capitalization of 17.39 B, debt of 447.46 M, and cash on hands of 526.27 M. Please note that company total value may be misleading and is a subject to accounting gimmicks. We encourage investors to carefully check all of the Watsco fundamentals before making security assessment based on enterprise value of the company| Takeover Price | Market Cap | Debt Obligations | Cash |
17.06 B | 17.39 B | 447.46 M | 526.27 M |
Watsco Investor Information
About 100.0% of the company outstanding shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 1.85. Watsco Inc recorded earning per share (EPS) of 12.87. The entity last dividend was issued on the 16th of January 2026. The firm had 3:2 split on the 17th of August 1998. Based on the analysis of Watsco's profitability, liquidity, and operating efficiency, Watsco Inc may be sliding down financialy. It has an above-average probability of going through some form of financial hardship next quarter.| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Operating Profit Margin | 0.097 | 0.0924 |
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| Total Cash From Operating Activities | 933.5 M | 889.1 M |
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| Operating Income | 944 M | 899 M |
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Watsco Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Watsco has an asset utilization ratio of 168.09 percent. This suggests that the Company is making $1.68 for each dollar of assets. An increasing asset utilization means that Watsco Inc is more efficient with each dollar of assets it utilizes for everyday operations.Watsco Profitability Analysis
Considering Watsco's profitability and operating efficiency indicators, Watsco Inc may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in March. Profitability indicators assess Watsco's ability to earn profits and add value for shareholders.Net Income | First Reported 1985-09-30 | Previous Quarter 183.6 M | Current Value 189.2 M | Quarterly Volatility 46.4 M |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 0.28 | 0.31 |
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| Net Profit Margin | 0.033 | 0.0634 |
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| Operating Profit Margin | 0.097 | 0.0924 |
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| Pretax Profit Margin | 0.0518 | 0.0948 |
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| Return On Assets | 0.0586 | 0.11 |
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| Return On Equity | 0.11 | 0.18 |
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For Watsco profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Watsco Inc to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Watsco utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Watsco's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Watsco over time as well as its relative position and ranking within its peers.
Watsco Earnings per Share Projection vs Actual
The next projected EPS of Watsco is estimated to be 1.8554 with future projections ranging from a low of 1.44 to a high of 2.08. Watsco's most recent 12-month trailing earnings per share (EPS TTM) is at 12.87. Please be aware that the consensus of earnings estimates for Watsco Inc is based on EPS before non-recurring items and includes expenses related to employee stock options.Watsco Earnings Estimation Breakdown
The calculation of Watsco's earning per share is based on the data from the past 12 consecutive months, used for reporting the company's financial figures. The next projected EPS of Watsco is estimated to be 1.8554 with the future projection ranging from a low of 1.44 to a high of 2.08. Please be aware that this consensus of annual earnings estimates for Watsco Inc is based on EPS before non-recurring items and includes expenses related to employee stock options.Last Reported EPS
1.44 Lowest | Expected EPS | 2.08 Highest |
Watsco Earnings Projection Consensus
Suppose the current estimates of Watsco's value are higher than the current market price of the Watsco stock. In this case, investors may conclude that Watsco is overpriced and will exhibit bullish sentiment. On the other hand, if the present value is lower than the stock price, analysts may conclude that the market undervalues the equity. These scenarios may suggest that the market is not as efficient as it should be at the estimation time, and Watsco's stock will quickly adjusts to the new information provided by the consensus estimate.
| Number of Analysts | Historical Accuracy | Last Reported EPS | Estimated EPS for 31st of March 2026 | Current EPS (TTM) | |
| 16 | 85.35% | 0.0 | 1.8554 | 12.87 |
Watsco Ownership Allocation
The majority of Watsco outstanding shares are owned by institutional investors. These institutions are usually referred to as non-private investors looking to purchase positions in Watsco Inc to benefit from reduced commissions. Consequently, other corporate entities are subject to a different set of regulations than regular investors in Watsco Inc. Please pay attention to any change in the institutional holdings of Watsco Inc as this could imply that something significant has changed or is about to change at the company. Please note that on September 12, 2025, Representative Valerie Hoyle of US Congress acquired under $15k worth of Watsco Inc's common stock.Watsco Profitability Analysis
The company reported the last year's revenue of 7.62 B. Total Income to common stockholders was 635.74 M with profit before taxes, overhead, and interest of 2.07 B.Watsco Past Distributions to stockholders
About Watsco Valuation
We use absolute and relative valuation methodologies to arrive at the intrinsic value of Watsco Inc. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Watsco Inc based exclusively on its fundamental and basic technical indicators. By analyzing Watsco's financials, quarterly and monthly indicators, and their related drivers, we attempt to find the most accurate representation of Watsco's intrinsic value. As compared to an absolute model, our relative valuation model uses a comparative analysis of Watsco. We calculate exposure to Watsco's market risk, different technical and fundamental indicators, and relevant financial multiples and ratios and then compare them to those of Watsco's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 2.4 B | 2.5 B | |
| Pretax Profit Margin | 0.09 | 0.05 | |
| Operating Profit Margin | 0.09 | 0.10 | |
| Net Profit Margin | 0.06 | 0.03 | |
| Gross Profit Margin | 0.31 | 0.28 |
Watsco Quarterly Retained Earnings |
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A single share of Watsco represents a small ownership stake in the entity. As a stockholder of Watsco, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Watsco Dividends Analysis For Valuation
At this time, Watsco's Dividends Paid is very stable compared to the past year. As of the 13th of February 2026, Dividend Paid And Capex Coverage Ratio is likely to grow to 2.20, while Dividend Yield is likely to drop 0.02. . At this time, Watsco's Retained Earnings are very stable compared to the past year. As of the 13th of February 2026, Earnings Yield is likely to grow to 0.07, while Retained Earnings Total Equity is likely to drop about 629.3 M.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | 487 M | 511.4 M | |
| Dividend Yield | 0.02 | 0.02 | |
| Dividend Payout Ratio | 0.71 | 0.41 | |
| Dividend Paid And Capex Coverage Ratio | 1.96 | 2.20 |
There are various types of dividends Watsco can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Watsco shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Watsco Inc directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Watsco pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Watsco by the value of the dividends paid out.
Watsco Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines.
| Common Stock Shares Outstanding | 37.5 M | |
| Quarterly Earnings Growth Y O Y | -0.058 | |
| Forward Price Earnings | 27.933 |
Watsco Current Valuation Indicators
Watsco's valuation analysis is a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Watsco's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Watsco, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Watsco's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Watsco's worth.When determining whether Watsco Inc offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Watsco's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Watsco Inc Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Watsco Inc Stock: Check out Your Current Watchlist to better understand how to build diversified portfolios, which includes a position in Watsco Inc. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in producer price index. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Will Trading Companies & Distributors sector continue expanding? Could Watsco diversify its offerings? Factors like these will boost the valuation of Watsco. Anticipated expansion of Watsco directly elevates investor willingness to pay premium valuations. Accurate valuation requires analyzing both current fundamentals and future growth trajectories. Every Watsco data point contributes insight, yet successful analysis hinges on identifying the most consequential variables.
Quarterly Earnings Growth (0.06) | Dividend Share 11.4 | Earnings Share 12.87 | Revenue Per Share | Quarterly Revenue Growth (0.04) |
Investors evaluate Watsco Inc using market value (trading price) and book value (balance sheet equity), each telling a different story. Calculating Watsco's intrinsic value - the estimated true worth - helps identify when the stock trades at a discount or premium to fair value. Seasoned market participants apply comprehensive analytical frameworks to derive fundamental worth and identify mispriced opportunities. External factors like market trends, sector rotation, and investor psychology can cause Watsco's market price to deviate significantly from intrinsic value.
Please note, there is a significant difference between Watsco's value and its price as these two are different measures arrived at by different means. Investors typically determine if Watsco is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. Conversely, Watsco's market price signifies the transaction level at which participants voluntarily complete trades.