Watsco Inc (WSO) Fair Value & Analysis
Industrials · US · Market cap $15.9B · ISIN US9426222009
What is Watsco Inc really worth?
Watsco Inc
WSO · US
A solid business, but trading 25% above our fair value of $251.37.
Strengths
Risks
For context
Fair value as of: Aug 29, 2026
From 24 valuation models · updated 6 days ago
Share price −5.9% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- Solid but not exceptional quality (65/100) and above fair value, neither a clear bargain nor a standout compounder.
- The price sits above our optimistic bull case: the favourable scenario is already priced in.
- The data supports the verdict: every model runs on fully documented inputs.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 29, 2026.
How to read this chart
60‑month range $201.02 – $540.75 · fair‑value band $179.59 – $314.51 · the $315.38 price screens above the $251.37 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 29, 2026.
Analysis
Watsco Inc (WSO) currently trades at $315.38, while our model-based Fair Value estimate is $251.37, implying the stock looks roughly 25.5% overvalued today. The Quality Score stands at 65/100 (solid quality), in the Industrials sector. Bull case: the DCF Models group reads highest at a median of $291.75 per share, and 3 of the 24 models we run sit above the $315.38 price. Bear case: the Asset-Based group reads lowest at $49.17, and 21 of the 24 models stay below the price. Evidence for this calculation is high.
Over the trailing twelve months, Watsco Inc generated revenue of $7.2B at a net margin of 6.9%. Revenue grew 0.1% year over year. It earns a return on equity of 18.6%. Net debt stands at $45.5M. Fundamentals as of Aug 29, 2026
Our scenario range runs from $179.59 (bear case) to $314.51 (bull case); at $315.38, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 35% below its 52-week high, currently below its 200-day average. For context, the median of 10 Industrials peers we cover trades at −39% fair-value upside, at −20%, WSO screens cheaper than that median.
Fair Value models
This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly $0.1223 per share, which is 0.0 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.
All 24 models by family
Widest divergence: DCF Models ($291.75) versus Asset-Based ($49.17). Highest evidence: FCF DCF (77).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Aug 29, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 65 · Market factors (momentum, volatility) 29
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
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.
Full company description
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.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Watsco Inc reported revenue of $7.2B in FY2025 versus $6.3B in FY2021, a compound +3.6%/yr. Reported net income was $497M in FY2025, compounding +4.4%/yr from FY2021.
of which total revenue +6.8 % · buybacks/dilution −0.6 %
Annual growth per factor. These are factors, not summands: multiplied they give the EPS growth rate, added they do not quite. Start and end points are 3-year averages (details on hover).
WSO screens 25% overvalued. Compare with W.W. Grainger, Inc →
Recent news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Watsco (WSO) Up 0.8% Since Last Earnings Report: Can It Continue?
- Watsco (WSO) Reported Softer Earnings, Is The Pullback A Valuation Gap?
- Is Softer International Revenue and Lower EPS Reshaping the Investment Case for Watsco (WSO)?
- Reddit, Axon, Watsco, Rivian, and Visteon Shares Are Soaring, What You Need To Know
Peer Group
Industrial Distribution · 112 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Industrial Distribution median · lower = cheaper
Strength profile in five axes (Snowflake)
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
VALUE 0: the price sits above our fair-value range.
Insider activity: 45/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Industrial Distribution stocks, each showing price versus our Fair Value estimate (as of Aug 29, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| W.W. Grainger, Inc GWW | $1,306 | $613.88 | −53% |
| Fastenal Company FAST | $51.14 | $20.64 | −60% |
| Ferguson Enterprises Inc FERG | $245.18 | $148.98 | −39% |
| WESCO International, Inc WCC | $347.60 | $213.01 | −39% |
| Watsco, Inc WSOB | $316.05 | $192.35 | −39% |
| Toromont Industries Ltd TIH | C$199.59 | C$127.90 | −36% |
| Applied Industrial Technologies, Inc AIT | $319.11 | $191.65 | −40% |
| Finning International Inc FTT | C$93.86 | C$76.38 | −19% |
| Addtech AB ADDTB | kr 344.00 | kr 156.35 | −55% |
| Core & Main, Inc CNM | $45.45 | $49.47 | +9% |
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