Watsco Valuation

Is WSO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • PM vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of WSO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WSO ($379.87) is trading below our estimate of fair value ($397.78)

Significantly Below Fair Value: WSO is trading below fair value, but not by a significant amount.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for WSO?

Other financial metrics that can be useful for relative valuation.

WSO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2x
Enterprise Value/EBITDA18.1x
PEG Ratio4.1x

Price to Earnings Ratio vs Peers

How does WSO's PE Ratio compare to its peers?

The above table shows the PE ratio for WSO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average22.8x
AER AerCap Holdings
6.3x-23.0%US$15.8b
SITE SiteOne Landscape Supply
42.4x11.8%US$7.4b
CNM Core & Main
23.1x16.0%US$9.2b
AIT Applied Industrial Technologies
19.2x4.2%US$7.2b
WSO Watsco
26.1x6.4%US$14.0b

Price-To-Earnings vs Peers: WSO is expensive based on its Price-To-Earnings Ratio (26.1x) compared to the peer average (22.8x).


Price to Earnings Ratio vs Industry

How does WSO's PE Ratio compare vs other companies in the US Trade Distributors Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a8.4%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a8.4%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: WSO is expensive based on its Price-To-Earnings Ratio (26.1x) compared to the US Trade Distributors industry average (16.8x).


Price to Earnings Ratio vs Fair Ratio

What is WSO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WSO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio25.9x
Fair PE Ratio20.2x

PM vs Fair Ratio: WSO is expensive based on its Price-To-Earnings Ratio (26.1x) compared to the estimated Fair Price-To-Earnings Ratio (20.2x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst WSO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$379.87
US$401.49
+5.7%
13.6%US$500.00US$277.00n/a12
Feb ’25US$394.90
US$405.37
+2.7%
15.6%US$500.00US$264.00n/a12
Jan ’25US$428.47
US$389.79
-9.0%
16.6%US$500.00US$264.00n/a12
Dec ’24US$396.25
US$362.59
-8.5%
12.1%US$450.00US$264.00n/a12
Nov ’24US$358.16
US$362.59
+1.2%
12.1%US$450.00US$264.00n/a12
Oct ’24US$377.72
US$350.47
-7.2%
12.7%US$450.00US$246.00n/a13
Sep ’24US$365.23
US$348.47
-4.6%
12.9%US$450.00US$246.00n/a13
Aug ’24US$376.95
US$347.17
-7.9%
13.3%US$450.00US$246.00n/a13
Jul ’24US$381.47
US$337.94
-11.4%
13.2%US$400.00US$227.00n/a13
Jun ’24US$327.18
US$335.78
+2.6%
13.7%US$400.00US$227.00n/a13
May ’24US$344.76
US$328.45
-4.7%
15.7%US$400.00US$227.00n/a11
Apr ’24US$318.16
US$299.64
-5.8%
17.2%US$375.00US$212.00n/a11
Mar ’24US$302.18
US$299.64
-0.8%
17.2%US$375.00US$212.00n/a11
Feb ’24US$300.37
US$269.55
-10.3%
14.1%US$323.00US$199.00US$394.9011
Jan ’24US$249.40
US$267.50
+7.3%
15.2%US$323.00US$199.00US$428.4710
Dec ’23US$269.94
US$265.30
-1.7%
16.5%US$323.00US$199.00US$396.2510
Nov ’23US$272.60
US$264.30
-3.0%
16.6%US$323.00US$199.00US$358.1610
Oct ’23US$257.46
US$273.80
+6.3%
19.4%US$350.00US$193.00US$377.7210
Sep ’23US$273.99
US$272.80
-0.4%
19.2%US$350.00US$193.00US$365.2310
Aug ’23US$278.82
US$267.67
-4.0%
20.8%US$350.00US$193.00US$376.959
Jul ’23US$240.98
US$297.78
+23.6%
20.9%US$400.00US$188.00US$381.479
Jun ’23US$254.43
US$300.11
+18.0%
19.7%US$400.00US$188.00US$327.189
May ’23US$266.78
US$308.67
+15.7%
17.4%US$400.00US$188.00US$344.769
Apr ’23US$304.20
US$304.13
-0.02%
7.1%US$350.00US$282.00US$318.168
Mar ’23US$273.26
US$304.13
+11.3%
7.1%US$350.00US$282.00US$302.188
Feb ’23US$280.25
US$306.86
+9.5%
7.2%US$350.00US$282.00US$300.377

Analyst Forecast: Target price is less than 20% higher than the current share price.


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