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Watsco (WSO) Stock Fundamentals, Analysis & Risk Signals

Health score, price, valuation, risk signals, and key metrics at a glance.

Watsco
NYSE•Industrials•Industrial Distribution
$315.13-0.25(<0.01%)Pre-market
Market Cap
$11.90B
P/E
25.0x
P/S
1.6x
P/B
4.0x

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. It 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. The company 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. It 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.

C

How this company scores

AverageMetricSide Score: 49/100

Strongest: Profitability (15/25); weakest: Growth (4/25).

Profitability15/25
Growth4/25
Balance Sheet & Red Flags15/25
Cash & Earnings Quality15/25
Strengths
Rising free cash flowHigh ROEInterest easily coveredNet cash position

Valuation vs. 5-year range

Today's multiple positioned against its own trailing range — a visual premium/discount check.

P/E · 25.0x5y range 14.3x – 36.9x
P/E 25.0x · near its 20-quarter median

Currently near its 20-quarter median.

P/S · 1.6x5y range 1.2x – 2.6x
P/S 1.6x · near its 20-quarter median

Currently near its 20-quarter median.

P/B · 4.0x5y range 4.0x – 7.2x

Watch items

Data-driven signals worth keeping an eye on across the last 8 quarters

High Risk

Margin Pressure

Watch

Operating margins declined 18.7% — watch for continued compression, which may signal competitive or cost pressure.

Earnings Quality

Red Flag

Free cash flow has been negative in 4 of the last 8 quarters — earnings are not translating to cash.

Price & Volume
Market Cap $11.90B

Metrics at a Glance

as of June 2026

Revenue & Profit

Revenue, EBITDA, operating income, net income, EPS, and shares

TTM Revenue
$7.28B
2Q
Q. Revenue
$2.10B
2%
TTM EBITDA
$728.85M
4Q
TTM Op. Income
$684.85M
4Q
Q. Op. Income
$238.37M
2Q
TTM Net Income
$475.73M
4Q
Q. Net Income
$163.34M
2Q
EPS
$4
12%
Shares Out.
$38.16M
7Q
$7.28B in TTM revenue declined 7.7% YoY, reaching $2.10B last quarter. TTM EBITDA of $728.85M and TTM operating income of $684.85M show growth is flowing through to the bottom line. TTM net income of $475.73M means revenue is converting into profit. Across the last 8 quarters, TTM revenue has risen for 2 consecutive quarters — an improving trend.

Margins

Gross, EBITDA, operating, and net margin trends

Gross Margin
27.5%
6%
EBITDA Margin
11.8%
2Q
Op. Margin
11.3%
2Q
Net Margin
7.8%
2Q
Op. margin of 11.3% is down 1.9% YoY — costs are rising relative to revenue. Net margin at 7.8% and gross margin of 27.5% show how much of each revenue dollar survives to profit. Across the last 8 quarters, operating margin has risen for 2 consecutive quarters — an improving trend.

Price Ratios

P/E, P/S, P/B, EV/EBITDA, FCF yield, and earnings yield

P/E Ratio
25.0x
8%
P/S Ratio
1.6x
23%
P/B Ratio
4.0x
34%
At 25.0x P/E, the stock trades within typical market levels. P/S of 1.6x and P/B of 4.0x provide additional context. Use the growth and margin sections to judge whether the multiple is justified. Over the past year, P/E is down 8% — an improving trend.

Assets & Liabilities

Total assets, cash, debt, book value, and leverage

Total Assets
$5.08B
2Q
Cash
$364.19M
2Q
Long-Term Debt
N/A
3Q
Book Value
$2.99B
8%
D/E Ratio
N/A
2Q
Debt/EBITDA
0.0
2Q

Cash Flow

Operating cash flow, free cash flow, FCF margin, and earnings quality

Op. Cash Flow
$-2.54M
66%
TTM Free Cash Flow
$697.14M
4Q
FCF Margin
9.6%
910%
FCF / Net Income
1.5
4Q
TTM FCF of $697.14M on $-2.54M in operating cash flow. The FCF / Net Income ratio of 1.5x means free cash flow covers net income — earnings are backed by cash. Across the last 8 quarters, free cash flow has risen for 4 consecutive quarters — an improving trend.

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· below its 20-quarter median

Currently below its 20-quarter median.

Revenue Decline

Watch

Revenue has softened, declining in 3 quarters. Watch for further erosion.

Cash Burn

Watch

4 of the last 8 quarters had negative FCF — inconsistent cash generation raises sustainability concerns.