Watsco, Inc. (WSO) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-35.3%

$200.95

vs $310.70 price

Levered DCF

$235.44

After debt service

Piotroski score

5 / 9

Average

Altman Z-score

6.94

Safe zone

Rating

A-

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	27.51×	35.52×	31.34×	16.13×	28.89×	32.23×	27.67×	21.47×
P/B	4.59×	6.69×	7.02×	4.69×	6.62×	5.34×	4.35×	3.87×
P/S	1.76×	2.33×	2.15×	1.22×	1.76×	1.57×	1.31×	1.15×
EV / EBITDA	16.4×	22.34×	19.72×	10.84×	17.18×	18.77×	16.73×	13.36×
Gross margin	28.0%	26.8%	27.4%	27.9%	26.6%	24.2%	24.3%	24.6%
Operating margin	9.6%	10.3%	10.9%	11.4%	10.0%	7.9%	7.7%	8.2%
Net margin	6.9%	7.0%	7.4%	8.3%	6.7%	5.3%	5.2%	5.3%
Current ratio	4.12×	3.13×	3.36×	2.54×	2.7×	3.05×	3.35×	4.03×
Debt / equity	0.17×	0.17×	0.18×	0.21×	0.22×	0.15×	0.27×	0.1×
Interest coverage	0×	-37.46×	161.55×	384.1×	631.05×	323.68×	90.99×	135.8×
Dividend yield	3.7%	2.4%	2.4%	3.7%	2.7%	3.3%	3.9%	4.0%
Payout ratio	95.3%	79.0%	71.3%	55.3%	70.3%	98.6%	98.2%	86.1%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	17.9%	20.2%	24.1%	31.8%	25.2%	18.1%	17.1%	18.0%
Return on invested capital	14.3%	16.9%	20.5%	25.9%	20.4%	15.7%	13.8%	16.6%
Return on assets	11.2%	11.8%	14.4%	17.2%	13.6%	10.9%	9.6%	11.2%
Free cash flow yield	4.2%	4.2%	3.4%	6.0%	2.9%	6.5%	5.1%	2.9%
Earnings yield	3.9%	3.0%	3.4%	6.8%	3.8%	3.4%	3.9%	4.7%
Enterprise value	$12.8B	$17.7B	$15.8B	$9.1B	$11.3B	$8B	$6.5B	$5.3B
Net debt / EBITDA	0.06×	-0.1×	0.24×	0.29×	0.38×	0.16×	0.78×	0.13×
Cash conversion cycle (days)	113	101	107	101	100	89	110	108