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 27.70 is considered Fairly compared with the five-year average of 26.06. The fair price of Watsco Inc (WSO) is between 259.67 to 390.77 according to relative valuation methord.
Relative Value
Fair Zone
259.67-390.77
Current Price：355.86
Fair
27.06
PE
1Y
3Y
5Y
Trailing
Forward
17.17
EV/EBITDA
Watsco Inc. (WSO) has a current EV/EBITDA of 17.17. The 5-year average EV/EBITDA is 16.51. The thresholds are as follows: Strongly Undervalued below 10.07, Undervalued between 10.07 and 13.29, Fairly Valued between 19.73 and 13.29, Overvalued between 19.73 and 22.94, and Strongly Overvalued above 22.94. The current Forward EV/EBITDA of 17.17 falls within the Historic Trend Line -Fairly Valued range.
18.16
EV/EBIT
Watsco Inc. (WSO) has a current EV/EBIT of 18.16. The 5-year average EV/EBIT is 17.44. The thresholds are as follows: Strongly Undervalued below 10.27, Undervalued between 10.27 and 13.85, Fairly Valued between 21.02 and 13.85, Overvalued between 21.02 and 24.61, and Strongly Overvalued above 24.61. The current Forward EV/EBIT of 18.16 falls within the Historic Trend Line -Fairly Valued range.
1.79
PS
Watsco Inc. (WSO) has a current PS of 1.79. The 5-year average PS is 1.76. The thresholds are as follows: Strongly Undervalued below 1.01, Undervalued between 1.01 and 1.39, Fairly Valued between 2.14 and 1.39, Overvalued between 2.14 and 2.52, and Strongly Overvalued above 2.52. The current Forward PS of 1.79 falls within the Historic Trend Line -Fairly Valued range.
20.88
P/OCF
Watsco Inc. (WSO) has a current P/OCF of 20.88. The 5-year average P/OCF is 21.91. The thresholds are as follows: Strongly Undervalued below 9.51, Undervalued between 9.51 and 15.71, Fairly Valued between 28.11 and 15.71, Overvalued between 28.11 and 34.32, and Strongly Overvalued above 34.32. The current Forward P/OCF of 20.88 falls within the Historic Trend Line -Fairly Valued range.
21.53
P/FCF
Watsco Inc. (WSO) has a current P/FCF of 21.53. The 5-year average P/FCF is 24.28. The thresholds are as follows: Strongly Undervalued below 10.14, Undervalued between 10.14 and 17.21, Fairly Valued between 31.35 and 17.21, Overvalued between 31.35 and 38.42, and Strongly Overvalued above 38.42. The current Forward P/FCF of 21.53 falls within the Historic Trend Line -Fairly Valued range.
Watsco Inc (WSO) has a current Price-to-Book (P/B) ratio of 4.80. Compared to its 3-year average P/B ratio of 6.38 , the current P/B ratio is approximately -24.88% higher. Relative to its 5-year average P/B ratio of 6.18, the current P/B ratio is about -22.43% higher. Watsco Inc (WSO) has a Forward Free Cash Flow (FCF) yield of approximately 0.00%. Compared to its 3-year average FCF yield of 3.71%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of 3.81% , the current FCF yield is about -100.00% lower.
4.69
P/B
Median3y
6.38
Median5y
6.18
3.85
FCF Yield
Median3y
3.71
Median5y
3.81
Competitors Valuation Multiple
The average P/S ratio for WSO's competitors is 1.64, 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 -4.31%, this premium appears unsustainable.
P/S
P/E
EV/EBITDA
EV/EBIT
P/S
Revenue Growth
Market Cap
Performance Decomposition
1Y
3Y
5Y
Market capitalization of WSO decreased by 25.73% over the past 1 year. The primary factor behind the change was an decrease in Margin Expansion from 9.34 to 9.15.
The secondary factor is the Revenue Growth, contributed -4.31%to the performance.
Overall, the performance of WSO in the past 1 year is driven by Margin Expansion. Which is more sustainable.
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