Watsco Inc (WSO) fair value: what the stock is really worth
As of Nov 5, 2026: fair value (intrinsic value) of Watsco Inc stock $250, price $311, that is 19.6% below the price, quality 66 out of 100. Rating: overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 6, 2026.
How to read this chart
60‑month range $198.81 – $534.79 · fair‑value band $182.93 – $313.03 · the $311.14 price screens above the $250.18 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 6, 2026.
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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.
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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.
Stock analysis
Watsco Inc (WSO) currently trades at $311.14, while our model-based Fair Value estimate is $250.18, 20% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the DCF Models group reads highest at a median of $289.29 per share, and 2 of the 26 models we run sit above the $311.14 price.
Bear case: the Asset-Based group reads lowest at $33.62, and 24 of the 26 models stay below the price. Data coverage for this calculation is high.
Scenario range: $182.93 (bear) to $313.03 (bull), the price of $311.14 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 66/100 (solid quality), in the Industrials sector.
Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.
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.
Key figures
Market cap $11.8B Large · P/E ratio 24.2 · P/S ratio 1.59 · EPS (TTM) $12.51 · Dividend yield 4.0% · Net margin 6.3% · Return on equity 16.2% · Return on assets (EBIT) 19.7%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 58 out of 100 (medium confidence).
What moves the price
The share trades about 31% below its 52-week high and 12% above its 52-week low, currently below its 200-day average.
For context, the median of 10 Industrials peers we cover trades at −27% fair-value upside, at −20%, WSO screens cheaper than that median.
Fair Value models
Bear$182.93Fair Value $250.18Bull$313.03
Price $311.14 · Downside -19.6%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then ($0.1784 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
In the last 6 months, no officer or director bought or sold shares on the open market.
Plus 2 other filings such as grants, option exercises or tax withholding. They are not market purchases or sales.
Sales are often planned (taxes, diversification, 10b5-1 plans). Purchases with their own money are seen as the stronger sign. For information only: not part of the quality score or Fair Value.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.69/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
−5.0%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
−0.2%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+7.4%
Start year 2020 (pandemic). Over 10 years: +5.8% a year
Revenue growth 40 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+17.3%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+15.3%
Earnings growth per share plus dividend.
Earnings per share, growth per year+11.3%
Dividend (yield on the price)4.0%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.11.3% vs 10.4%, steady
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.8% → 10%
Pace: the 5-year rate starts in 2020 (pandemic)
Growth Forecast
Price in line with expectations
The price assumes about as much growth as the company has delivered so far and about what analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+9.4%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+8.2%
Yearly sales growth analysts expect, extended to five years.
After inflation (USA: IMF forecast 2.4% a year to 2030, 3.1% from 2016 to 2025) that is about +6.8% a year for the price and +5.7% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (96 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Hype
Recent news coverage is unusually upbeat, far more positive than stocks are typically covered.
AI conclusion: Watsco's main strength is distribution scale via acquisitions that add density in new categories together with technology platforms deepening contractor ties, while its main weak point remains the lack of durable evidence across most categories.
Main risk: Watsco derives 53 percent of revenues from joint ventures with Carrier and 62 percent of purchases from that supplier, so any material change in the relationship could disrupt supply or reduce margins.
Bull case: Watsco could strengthen its Carrier joint ventures through deeper technology integration and expand into plumbing while using its digital platforms to retain contractors and offset any supplier shifts.
Bear case: A deterioration in the Carrier relationship or successful inroads by Ferguson and direct manufacturer sales could erode Watsco's market position and compress margins across its distribution network.
Watsco has moved to broaden its distribution footprint by acquiring a sizable plumbing and HVAC player serving the Northeast. This adds density in a new product category while its technology platforms continue to deepen contractor ties in a market that has stabilized after the refrigerant shift. Our models currently see it as overvalued. Will the expanded reach and efficiency tools generate lasting margin gains or will the added complexity slow progress?
Price, fair value, quality and upside side by side.
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Peer Groupⓘ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.Industrial Distribution · 107 stocks
Beats the industry median on 7/14 measures
A mixed picture versus its industry peers.
Valuation
Quality Score66 · Top 25%
Fair Value upside−19.6% · Below median
Profitability
Return on equity (12 months)16.2% · Top 25%
Return on assets11.2% · Top 25%
Net margin (12 months)6.3% · Above median
Operating margin (12 months)10.1% · Above median
Growth and dividend
Revenue growth (quarter YoY)7.4% · Below median
Dividend yield (12 months)4.0% · Top 25%
Valuation Multiplesvs Industrial Distribution median · lower = cheaper
P/E (12 months)24.2× · Pricier than median
P/B4.26× · Priciest 25%
P/S (12 months)1.59× · Priciest 25%
Price / free cash flow (fiscal year)22.1× · Pricier than median
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Watsco Inc Fair Value". https://www.fairvalue-calculator.com/stock/WSO
Frequently asked questions
Is Watsco Inc (WSO) overvalued or undervalued?
As of Nov 6, 2026, our model estimates a fair value of $250.18 versus a price of $311.14, about 20% lower (overvalued).
What is the fair value of WSO?
Our model-based fair value for Watsco Inc is $250.18 (as of Nov 6, 2026), built from audited fundamentals. The current price: $311.14.
What is the quality score of WSO?
Watsco Inc has a Quality Score of 66/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Watsco Inc (WSO)?
Our model-based price target is the fair value of $250.18 (as of Nov 6, 2026) from 26 valuation models. Cautious scenario $182.93, optimistic scenario $313.03. It is a calculation from audited fundamentals, not an analyst target.
What is the Watsco Inc stock forecast for 2026?
Our models put fair value at $250.18, about 20% lower versus a price of $311.14 (overvalued). Cautious scenario $182.93, optimistic scenario $313.03. The calculation is refreshed regularly with new filings.
What is the revenue of Watsco Inc (WSO)?
Watsco Inc reported trailing-twelve-month revenue of about $7.4B (latest available figure, as of Nov 6, 2026).
Does Watsco Inc pay a dividend?
Watsco Inc currently shows a dividend yield of 3.95% relative to its recent price (as of Nov 6, 2026).
What growth is priced into Watsco Inc (WSO)?
For today's price to be fair in a discounted-cash-flow model, Watsco Inc would have to grow free cash flow by +9.4 % per year for five years (discount rate 9.3 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +7.5 % per year. As of Nov 6, 2026.
What discount rate (WACC) does the fair value of WSO use?
Our models discount Watsco Inc at 9.3 %: a base by market capitalisation (large), damped by beta 1.04, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Watsco Inc that is +9.4 % per year a year over ten years, using the same discount rate (9.3 %) and the same formula as our fair value.
How much growth has Watsco Inc (WSO) delivered so far?
Over the past 5 years revenue at Watsco Inc grew +7.5 % a year. The price currently implies +9.4 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Watsco Inc (WSO) growing?
The median revenue growth in the sector is +7.8 % a year. That is the yardstick for the growth priced into Watsco Inc (+9.4 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Watsco Inc (WSO)?
The free-cash-flow yield on the price is 4.52 %: that much free cash flow Watsco Inc produces per unit of market value. When it exceeds the discount rate of our models (9.3 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Watsco Inc (WSO)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Watsco Inc it is $250.18 per share (as of Nov 6, 2026), against a price of $311.14. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Watsco Inc stock overvalued or undervalued in 2026?
As of Nov 6, 2026, WSO trades above its calculated fair value: price $311.14, fair value $250.18, a gap of about −20% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of WSO?
No. The price is what the market pays today ($311.14); the fair value is what the company's own numbers justify ($250.18). For Watsco Inc the two are $60.96 per share apart. That gap is exactly why we show both numbers side by side.
How much is Watsco Inc worth?
The market values Watsco Inc at about $11.8B (market capitalisation, as of Nov 6, 2026). Per share that is $311.14; our models calculate a fair value of $250.18 per share.
What do the bullish and bearish scenarios say about WSO?
Our models span a range for Watsco Inc: cautious scenario $182.93, base $250.18, optimistic $313.03 per share (as of Nov 6, 2026, price $311.14). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of WSO?
Watsco Inc trades at a price-to-earnings ratio of 24.2 (as of Nov 6, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $250.18 is built from several models across several years. Median P/E at fiscal year-end, 10 fiscal years (2016 to 2025), reported earnings: 27.6. Other multiples: PEG 1.1, P/B 4.3, P/S 1.6, EV/EBITDA 16.5.
What is the PEG ratio of WSO?
The PEG ratio of Watsco Inc is 1.11 (P/E divided by earnings growth, as of Nov 6, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Watsco Inc (WSO)?
Balance-sheet figures for Watsco Inc (as of Nov 6, 2026): return on equity 16.2%. They feed the Quality Score of 66/100, which measures business quality independently of the share price.
How far is WSO from its 52-week high?
Watsco Inc trades at $311.14, about 31% below its 52-week high of $447.98 and 12% above the low of $276.82 (as of Nov 5, 2026). Distance from the high says nothing about value: that is what the fair value of $250.18 is for.
Which stocks are comparable to Watsco Inc?
From the same area (Industrials) we also value W.W. Grainger, Inc, Fastenal Company, Ferguson Enterprises Inc, WESCO International, Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Watsco Inc stock attractive at the current price?
The data as of Nov 6, 2026: price $311.14, calculated fair value $250.18 (−20%), Quality Score 66/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of WSO calculated?
We run Watsco Inc through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $250.18, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 15.5% above its aggregate fair value. Watsco Inc itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Watsco Inc (WSO)?
The closing price on Nov 5, 2026 was $311.14. Our model-based fair value is $250.18, about 20% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Watsco Inc right now?
Solid but not exceptional quality (66/100) and above fair value, neither a clear bargain nor a standout compounder. The price sits in the upper half of our model range, so the margin of safety is thin. The data supports the verdict: every model runs on fully documented inputs.
Where does the earnings growth of Watsco Inc (WSO) come from?
Earnings per share at Watsco Inc grew +12.7 % a year from 2014 to 2025. Broken into its drivers: revenue per share +6.1 %, EBIT margin +2.7 %, tax rate +2.3 %, residual (interest, one-offs) +1.0 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Watsco Inc
How large is the market capitalisation of Watsco Inc (WSO)?
The market capitalisation of Watsco Inc is $11.8B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Watsco Inc (WSO)?
The price-to-sales ratio of Watsco Inc is 1.59 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Watsco Inc (WSO)?
Earnings per share at Watsco Inc are $12.51 (price ÷ EPS = P/E 24.2). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Watsco Inc (WSO)?
The dividend yield of Watsco Inc is 4.0% (payout 98.3%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Watsco Inc (WSO)?
The net margin of Watsco Inc is 6.3% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Watsco Inc (WSO)?
The return on equity (ROE) of Watsco Inc is 16.2% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Watsco Inc (WSO)?
On an EBIT basis the return on assets of Watsco Inc is 19.7% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Watsco Inc (WSO)?
The operating margin of Watsco Inc is 10.1% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Watsco Inc (WSO)?
Revenue at Watsco Inc is growing +7.4% versus a year earlier (3y avg −0.2%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Watsco Inc (WSO)?
Earnings per share at Watsco Inc are growing −5.4% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Watsco Inc (WSO) carry?
The net debt of Watsco Inc is $45.5M (fiscal year 2025, ≈ 0.1 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 6, 2026