WSO Valuation

Watsco Inc

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407.040

-0.96(-0.235%)1D

Overview
Forecast
Valuation
Earnings

WSO Relative Valuation

WSO's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, WSO is overvalued; if below, it's undervalued.

Historical Valuation

Watsco Inc (WSO) is now in the Fair zone, suggesting that its current forward PE ratio of 29.30 is considered Fairly compared with the five-year average of 27.02. The fair price of Watsco Inc (WSO) is between 306.70 to 429.34 according to relative valuation methord.

Relative Value

Fair Zone

306.70-429.34

Current Price：408.00

Fair

29.16

Trailing

Forward

18.52

EV/EBITDA

Watsco Inc. (WSO) has a current EV/EBITDA of 18.52. The 5-year average EV/EBITDA is 16.62. The thresholds are as follows: Strongly Undervalued below 10.04, Undervalued between 10.04 and 13.33, Fairly Valued between 19.91 and 13.33, Overvalued between 19.91 and 23.20, and Strongly Overvalued above 23.20. The current Forward EV/EBITDA of 18.52 falls within the Historic Trend Line -Fairly Valued range.

19.59

EV/EBIT

Watsco Inc. (WSO) has a current EV/EBIT of 19.59. The 5-year average EV/EBIT is 17.56. The thresholds are as follows: Strongly Undervalued below 10.22, Undervalued between 10.22 and 13.89, Fairly Valued between 21.24 and 13.89, Overvalued between 21.24 and 24.91, and Strongly Overvalued above 24.91. The current Forward EV/EBIT of 19.59 falls within the Historic Trend Line -Fairly Valued range.

1.99

Watsco Inc. (WSO) has a current PS of 1.99. The 5-year average PS is 1.74. The thresholds are as follows: Strongly Undervalued below 1.00, Undervalued between 1.00 and 1.37, Fairly Valued between 2.12 and 1.37, Overvalued between 2.12 and 2.49, and Strongly Overvalued above 2.49. The current Forward PS of 1.99 falls within the Historic Trend Line -Fairly Valued range.

18.94

P/OCF

Watsco Inc. (WSO) has a current P/OCF of 18.94. The 5-year average P/OCF is 22.64. The thresholds are as follows: Strongly Undervalued below 7.63, Undervalued between 7.63 and 15.13, Fairly Valued between 30.15 and 15.13, Overvalued between 30.15 and 37.66, and Strongly Overvalued above 37.66. The current Forward P/OCF of 18.94 falls within the Historic Trend Line -Fairly Valued range.

19.78

P/FCF

Watsco Inc. (WSO) has a current P/FCF of 19.78. The 5-year average P/FCF is 26.79. The thresholds are as follows: Strongly Undervalued below -6.27, Undervalued between -6.27 and 10.26, Fairly Valued between 43.31 and 10.26, Overvalued between 43.31 and 59.84, and Strongly Overvalued above 59.84. The current Forward P/FCF of 19.78 falls within the Historic Trend Line -Fairly Valued range.

Watsco Inc (WSO) has a current Price-to-Book (P/B) ratio of 5.62. Compared to its 3-year average P/B ratio of 6.38 , the current P/B ratio is approximately -12.01% higher. Relative to its 5-year average P/B ratio of 6.21, the current P/B ratio is about -9.58% higher. Watsco Inc (WSO) has a Forward Free Cash Flow (FCF) yield of approximately 2.48%. Compared to its 3-year average FCF yield of 3.73%, the current FCF yield is approximately -33.35% lower. Relative to its 5-year average FCF yield of 3.96% , the current FCF yield is about -37.28% lower.

5.59

P/B

Median3y

6.38

Median5y

6.21

2.52

FCF Yield

Median3y

3.73

Median5y

3.96

Competitors Valuation Multiple

The average P/S ratio for WSO's competitors is 2.51, providing a benchmark for relative valuation. Watsco Inc Corp (WSO) exhibits a P/S ratio of , which is -100.00% above the industry average. Given its robust revenue growth of -3.59%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Carlisle Companies Inc

Mohawk Industries Inc

0.76

0.03%

8.15B

Performance Decomposition

Market capitalization of WSO decreased by 14.38% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 10.03 to 10.51.

The secondary factor is the Revenue Growth, contributed -3.59%to the performance.

Overall, the performance of WSO in the past 1 year is driven by Margin Expansion. Which is more sustainable.

-3.59%

2.14B → 2.06B

Revenue Growth

4.79%

10.03 → 10.51

Margin Expansion

-15.58%

36.76 → 31.03

P/E Change

-14.38%