WSO
Watsco Inc
$402.54
▼ 0.5%Updated Today 12:11 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.
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 $402.54, above its 50-day average ($400.41) and 200-day average ($382.80). Price above both averages, with the shorter one above the longer, is the textbook definition of an uptrend — momentum favours buyers.
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 (~2.9% 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.
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
$402.54
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 this stock sits versus what most companies trade at.
Typical ranges are general references (e.g., many stocks trade at ~18–26x earnings), not hard rules. Context only — not investment advice.
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.
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.