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Watsco, Inc. (WSO) Stock Verdict & Ratings | Investment Bastion

Stock Verdict·Updated today

Watsco, Inc.

WSOMarket cap $11BPrice $282.2

Country🇺🇸United States

SectorIndustrials

IndustryTrading & Distribution

Distributes air conditioning, heating, and refrigeration equipment across the Americas, controlling roughly a third of the US HVAC distribution market. As homes and warehouses keep needing climate control, Watsco quietly profits from every heat wave and cold snap.

In Bastion Portfolios?

52W Return-23%Global Market +16%?

01Key Ratings

How does this stock score across Bastion factors?

Growth

Historical Revenue

Rev CAGR (3y)-0%3

Revenue Forecast

Rev CAGR (1y)+4%4

Rev CAGR (3y)+5%4

Rev CAGR (5y)+8%7

Earnings Forecast

EPS Growth Y+1-10%3

EPS Growth Y+2+9%6

EPS Growth Y+3+10%6

Quality

Margins

EBIT Margin9%4

Net Income Margin7%4

Free Cash Flow Margin10%6

Debt

Net Debt/EBITDA0.19

Efficiency

ROE15%7

ROA11%9

Earnings Stability55

GEAR+AVERAGE44

Overall rating across all five factors

Value

Price Multiples

P/E Ratio (Forward)233

P/E Ratio (Forward 3y)203

P/BV3.74

EV Multiples

EV/EBITDA Fwd154

EV/EBIT Fwd165

Yield

Free Cash Flow Yield6.3%7

Dividend Yield4.7%9

Momentum

Short term

1 month return-9%3

3 month return-25%1

YTD return-14%3

Mid term

Price vs 52wHigh62%2

1 year return-23%2

Long term

3 year return-23%2

5 year return+19%4

Risk Shield

Price Risk

Beta0.95

Volatility35%5

Free Cash Flow

Free Cash Flow Margin10%6

Free Cash Flow Yield6.3%7

Quality

ROCE17%8

Earnings Stability55

Net Debt/EBITDA0.19

02Growth

Is it actually growing, and how fast?

WSOWatsco

Revenue FY25$7.6B

GROWTH RATING↗

AVERAGE41 / 100

REVENUE GROWTH▾SCORE

Revenue, last 3Y, CAGR-0%3

Revenue, next 1Y+4%4

Revenue, next 3Y, CAGR+5%4

Revenue, next 5Y, CAGR+8%7

EARNINGS FORECAST▾SCORE

EPS growth, FY26E-10%3

EPS growth, FY27E+9%6

EPS growth, FY28E+10%6

GROWTH ASSESSMENT

STRENGTHS

After shrinking over the last 3 years, revenue is set to grow 5%/yr from here.

The runway holds up: revenue is set to grow 8%/yr over five years.7/10

WATCH

A mid-pack grower, ahead of 41% of companies worldwide.

Revenue is set to grow 5%/yr over the next 3 years, in line with the market.5/10

Earnings are set to grow in step with sales (EPS about 9%/yr vs revenue 5%/yr). One year dips: EPS falls 10% next year.

WEAKNESSES

Revenue held flat over the last 3 years, behind 70% of companies worldwide.3/10

BOTTOM LINE

Steady Grower

A middle-of-the-pack grower that's turning around. The one thing to watch: revenue has shrunk over the past 3 years.

03Price Momentum

Is the market behind it right now?

MOMENTUM RATING↗

VERY WEAK6 / 100

SHORT-TERM RETURNS▾SCORE

1-month return-9%3

3-month return-25%1

YTD return-14%3

MID & LONG-TERM▾SCORE

% of 52-week high62%2

1-year return-23%2

3-year return-23%2

5-year return+19%4

MOMENTUM ASSESSMENT

STRENGTHS

None flagged.

WATCH

None flagged.

WEAKNESSES

Weak long-term results. It has been a disappointing long-term hold (-23% over three years and +19% over five), behind 70% of the market.

It's down 23% over the past year, now 38% below its 52-week high. That is lagging the market.

The stock is underperforming over the past month (-9%), over three months (-25%) and so far this year (-14%).

BOTTOM LINE

Falling Knife

Returns rank poorly over both the short and long run, and the price is still falling. Momentum is firmly negative — catching this is a bet against the tape, not with it. Wait for a base to form. The one thing to watch: the multi-year record is weak.

04Value

Are you paying a fair price for it?

Stop guessing on Watsco, Inc.. Get the full investment case.

Premium

$20.75/month

Billed annually at $249/year $348

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Loading charts…

02Growth

Is it actually growing, and how fast?

WSOWatsco

Revenue FY25$7.6B

GROWTH RATING↗

AVERAGE41 / 100

REVENUE GROWTH▾SCORE

Revenue, last 3Y, CAGR-0%3

Revenue, next 1Y+4%4

Revenue, next 3Y, CAGR+5%4

Revenue, next 5Y, CAGR+8%7

EARNINGS FORECAST▾SCORE

EPS growth, FY26E-10%3

EPS growth, FY27E+9%6

EPS growth, FY28E+10%6

GROWTH ASSESSMENT

STRENGTHS

After shrinking over the last 3 years, revenue is set to grow 5%/yr from here.

The runway holds up: revenue is set to grow 8%/yr over five years.7/10

WATCH

A mid-pack grower, ahead of 41% of companies worldwide.

Revenue is set to grow 5%/yr over the next 3 years, in line with the market.5/10

Earnings are set to grow in step with sales (EPS about 9%/yr vs revenue 5%/yr). One year dips: EPS falls 10% next year.

WEAKNESSES

Revenue held flat over the last 3 years, behind 70% of companies worldwide.3/10

BOTTOM LINE

Steady Grower

A middle-of-the-pack grower that's turning around. The one thing to watch: revenue has shrunk over the past 3 years.

03Price Momentum

Is the market behind it right now?

MOMENTUM RATING↗

VERY WEAK6 / 100

SHORT-TERM RETURNS▾SCORE

1-month return-9%3

3-month return-25%1

YTD return-14%3

MID & LONG-TERM▾SCORE

% of 52-week high62%2

1-year return-23%2

3-year return-23%2

5-year return+19%4

MOMENTUM ASSESSMENT

STRENGTHS

None flagged.

WATCH

None flagged.

WEAKNESSES

Weak long-term results. It has been a disappointing long-term hold (-23% over three years and +19% over five), behind 70% of the market.

It's down 23% over the past year, now 38% below its 52-week high. That is lagging the market.

The stock is underperforming over the past month (-9%), over three months (-25%) and so far this year (-14%).

BOTTOM LINE

Falling Knife

04Value

Are you paying a fair price for it?

Stop guessing on Watsco, Inc.. Get the full investment case.

Premium

$20.75/month

Billed annually at $249/year $348

✓
Stock VerdictValuation and investment strategy for 4,000+ stocks. Days of hedge fund analyst research, done in 2 minutes.
✓
RadarFind your next investment idea: top-ranked stocks across all 9 Bastion strategies.
✓
Portfolio ManagerCheck if Bastion algorithms added the stock you care about to their portfolios.

Secure via Stripe

Trusted by 1,000+ investors in our community