WSO-B
WATSCO INC
Next earnings Jul 28, 2026 · consensus $4.45 EPS, $2.16B rev
Last earnings +0.0% on 2026-04-28
$350.00
▲ 0.00%$350.00▼ -17.45%
over 1Y
L $333.14H $453.37
Earnings Dividend Split Congress buy Congress sellGrouped by date · hover a pin to expand
Today+0.0%
1W+0.0%
1M+0.0%
3M-4.1%
YTD+5.1%
1Y-17.4%
Hold
Conviction
Horizon
Long (>12mo)
12-mo target
$•••
Street · 22 analysts
Hold
Best-in-class HVAC distributor with 17.9% ROE and a fat dividend, but declining revenue and a 28.6x P/E say hold.
Revenue $7.24B · FY2025
The read
Middling fundamentals and a rich price (~70% above fair value) leave little margin of safety — a wait-and-see.
Watsco is the leading distributor of HVAC equipment and supplies in North America, and the franchise quality shows in the ratios: a 17.9% return on equity, 28.0% gross margin and an asset-light model that needs only $34.5M of capex on $7.24B of revenue. The balance sheet is pristine — current assets of $2.95B dwarf current liabilities of $718M, and equity grew 4.7% to $2.78B. This is a steady cash machine that returns most of it to shareholders: dividends rose 11.9% to $474M in FY2025, nearly matching net income.
The issue is that FY2025 was a step back. Revenue fell 5.0% to $7.24B, net income dropped 7.3% to $497M (EPS $12.25, -7.9%), and operating cash flow fell sharply by 26.3% to $570M, drawing cash down 17.7% to $433M. Against a history that peaked at $7.62B revenue and $601M net income (FY2022), the company is now off its highs — consistent with a soft replacement/new-construction HVAC cycle. The decline looks cyclical rather than structural given the durable distribution moat, but it is a decline nonetheless.
Is WSO-B a buy? The one-page verdict, explained →
The options angle
model · matches our verdictCovered call~90d expiry
- Long 100 shares @ ~350.00
- Short call 370 @ ~22.03 est
debit $32,797max +$4,203max −$32,796BE 327.97
HOLD means own it, don't chase it — harvesting premium against the position matches the verdict.
Educational template, not a trade recommendation. Strikes and premiums are Black-Scholes model estimates from the last close and 30-day realized volatility — real chains, spreads and IV will differ. Options involve substantial risk.
Financials · annual, by fiscal year
| Line item | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | $6.28B | $7.27B | $7.28B | $7.62B | $7.24B |
| Gross profit | $1.67B | $2.03B | $1.99B | $2.04B | $2.03B |
| Operating income | $629M | $832M | $795M | $782M | $720M |
| Net income | $419M | $601M | $536M | $536M | $497M |
| Diluted EPS | $10.78 | $15.41 | $13.67 | $13.30 | $12.25 |
| Net margin | 6.7% | 8.3% | 7.4% | 7.0% | 6.9% |
Annual figures from SEC 10-K XBRL filings. Open the filing links below for full statement detail.
Key statistics
Valuation
Enterprise value$14.0B
EV / EBITDA18.4
EV / Sales1.9
EV / FCF26.2
P / FCF26.6
PEG (trailing)—
Earnings yield3.5%
FCF yield3.8%
Quality & risk
ROIC (est.)18.8%
Free cash flow$535M
Total debt$246M
Net cash$187M
Piotroski F-Score6/9
Capital returns
Buyback yield0.0%
Dividend yield (est.)3.3%
Shareholder yield3.4%
Shares Δ YoY+1.2%
Computed from SEC XBRL annual figures + the current quote. EV and ROIC use long-term + current debt where filed; estimates, not investment advice.
Disclosure timeline
SEC · 8-Ks + reportsSome governance/structural items recently, but no outright red flags.
Recent filings
all on EDGAR ↗8-K/APeriod ending 2026-04-232026-06-04open ↗8-KPeriod ending 2026-06-042026-06-04open ↗424B7Filing2026-06-04open ↗8-KPeriod ending 2026-06-012026-06-03open ↗SCHEDULE 13G/AFiling2026-05-14open ↗SCHEDULE 13GFiling2026-05-14open ↗10-QPeriod ending 2026-03-312026-05-08open ↗SCHEDULE 13GFiling2026-04-30open ↗8-KPeriod ending 2026-04-232026-04-29open ↗SCHEDULE 13GFiling2026-04-29open ↗8-KPeriod ending 2026-04-282026-04-28open ↗DEF 14APeriod ending 2026-06-012026-04-24open ↗
Frequently asked
- Is WATSCO INC (WSO-B) a buy?
- WSO-B currently carries a Hold rating with 3/5 conviction, derived from its latest SEC filings. Best-in-class HVAC distributor with 17.9% ROE and a fat dividend, but declining revenue and a 28.6x P/E say hold.
- What is WSO-B's fair value?
- A Modified-Graham model based on WSO-B's SEC fundamentals estimates a fair value of about $104.13. It is an estimate from reported earnings, not a price target.
- Is WSO-B overvalued or undervalued?
- Against a Modified-Graham fair-value estimate, WSO-B currently appears overvalued relative to its SEC-grounded earnings power.
- What is WATSCO INC's quality score?
- WSO-B scores 58.30606151338223/100 (grade C) on a SEC-grounded quality model spanning value, growth, profitability, financial health and momentum.
Sources: SEC EDGAR (CIK 0000105016, latest 10-Q filed 2026-05-08) · EODHD · Proprietary analysis · as of 6/21/2026, 8:45:09 PM.
About this recommendation — produced by TENK/calls (tenkcalls.com), Luxembourg · not investment advice
AI-generated analysis, produced by our proprietary engine from SEC filing data.
Investment recommendation produced by TENK/calls (tenkcalls.com), Luxembourg. Completed Jun 21, 2026, 4:45 PM ET. Ratings & methodology: definitions · All recommendations to date: track record · Conflicts: disclosures. Not investment advice.
Research and education only — not financial advice. TENKis not a registered investment adviser or broker-dealer and gives no personalized advice. Every call is impersonal — identical for all users, generated on a schedule from SEC filings plus a delayed/third-party price feed — may be wrong or out of date, and is not a recommendation to buy or sell any security. The operator and an affiliated trading operation may hold or trade the securities TENK rates; see Disclosures. Past performance does not guarantee future results. Do your own research.