WATSCO INC
$308.46
+0.22 (+0.07%) · delayed · Nov 13, 2026
Five-year price
52w $277.34 to $459.00
- Market cap
- $11.7B
- Enterprise value
- $11.6B
- P/E
- 25.2×
- 23.6× on 3y avg EPS
- EV / EBIT
- 16.1×
- FCF yield
- 4.6%
- ROIC
- 21.2%
- Debt / equity
- 0.13
- Piotroski F
- 5/9
Value scorecard · FY2025
Does it pass the value tests?
Quality
83
- ●ROIC > 12% (5y avg)5y avg ROIC 27.3%
- ●ROE > 15% (5y avg)5y avg ROE 23.8%
- ●Stable operating marginsMargin volatility 0.6% (σ, 5y)
- ●Earnings convert to cashFCF / net income 102% (5y avg)
- ●Growing revenueRevenue CAGR 5y 7.4%
- ○Shrinking share countDiluted shares 7.8% over 5y
Value
0
- ○P/E below 15P/E 25.2
- ○EV/EBIT below 12EV/EBIT 16.1
- ○FCF yield above 6%FCF yield 4.6%
- ○Price below Graham NumberGraham Number $142.22
- ○P/B below 3P/B 4.2
Safety
80
- ●Debt / equity below 0.5D/E 0.13
- ●Debt payable in < 4 yrs of earningsNet debt $-0.1B
- ●Interest coverage > 8xCoverage 1033.5x
- ●Current ratio > 1.5Current ratio 4.12
- ○Piotroski F-score ≥ 6F-score 5/9
Graham Defensive
71
- ●Adequate size (revenue > $2B)Revenue $7.2B
- ●Strong condition (current ratio ≥ 2)Current ratio 4.12
- ●Earnings stability (no loss, 10y)10 years of data
- ●Uninterrupted dividendsDividends paid every year on record
- ●Earnings growth ≥ 33% (10y, 3y avgs)EPS growth 125%
- ○Moderate P/E (≤ 15 on 3y avg EPS)P/E (3y avg) 23.6
- ○P/E × P/B ≤ 22.5Product 99.2
Valuation lab
What do you have to believe?
At $308.46, the market is pricing in about 6.7% annual free-cash-flow growth for the next decade (9% discount rate, 2.5% terminal growth).
Starting cash flow
Net debt −$72M · 38M shares · 5y revenue CAGR 7.4%
Intrinsic value
$314.57
Price
$308.46
Margin of safety
2%
What the price implies
The market is paying for 6.7% annual cash-flow growth for 10 years at a 9.0% discount rate.
Terminal value share
59% of the value sits beyond year 10.
Financial statements
A decade of the record.
USD millions · fiscal years · source: SEC 10-K XBRL
| Line item | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 4,221 | 4,342 | 4,547 | 4,770 | 5,055 | 6,280 | 7,274 | 7,284 | 7,618 | 7,239 |
| Gross profit | 1,035 | 1,066 | 1,120 | 1,157 | 1,223 | 1,668 | 2,030 | 1,992 | 2,045 | 2,030 |
| Operating income | 346 | 354 | 372 | 367 | 401 | 629 | 832 | 795 | 782 | 720 |
| Operating margin | 8.2% | 8.2% | 8.2% | 7.7% | 7.9% | 10.0% | 11.4% | 10.9% | 10.3% | 10.0% |
| Pre-tax income | 342 | 348 | 369 | 363 | 400 | 628 | 829 | 790 | 803 | 738 |
| Income tax | 106 | 90 | 73 | 67 | 77 | 129 | 126 | 156 | 167 | 150 |
| Net income | 183 | 208 | 243 | 246 | 270 | 419 | 601 | 536 | 536 | 497 |
| EPS (diluted) | 5.15 | 5.81 | 6.49 | 6.50 | 7.01 | 10.78 | 15.41 | 13.67 | 13.30 | 12.25 |
| Diluted shares | 33 | 33 | 34 | 35 | 35 | 35 | — | 37 | 38 | 38 |
Who owns it