WSO · Intrinsic value
Is Watsco, Inc. (WSO) overvalued or undervalued?
As of Oct 19, 2026, TickerWorth's valuation lenses put Watsco, Inc. (WSO) at $95.32 – $325.72, too broad a range to say where the delayed market price of $294.19 sits in it, so we do not call it over- or undervalued. It is a model estimate, and every input behind it is sourced below.
Model by Miraaj Patel · generated from SEC filings and market data · Updated Oct 19, 2026 · How these pages are made
What is WSO worth?
- Fair-value range
- $95.32 – $325.72
- Market price
- $294.19
- Gap to fair value
- —
- Verdict
- Too wide to call
Reverse DCF: Today's price implies revenue growth of 11.2% a year for 5 years; our model assumes 4.2% a year on average over the same horizon.
What is WSO's TickerWorth Score?
Scores lower than most companies we compare it with
Compared with Industrials companies in US
Its strongest point: strong balance sheet. Its weakest: growth is slow or negative.
- Value · 61 of 100
Cheaper than 61% of Industrials companies in US
- Price vs worth · 29 of 100
- Quality · 42 of 100
More profitable than 42% of Industrials companies in US
- Financial health · 86 of 100
Financially stronger than 86% of Industrials companies in US
- Growth · 12 of 100
Growing faster than 12% of Industrials companies in US
- Momentum · 13 of 100
Outperformed 13% of Industrials companies in US over the past year
Confidence: Medium confidence · Scored
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Why WSO gets a range, not one number
At a recent price of $294.19, Watsco, Inc. (WSO) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $95.32 and $325.72 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
Read the full reasoning
The valuation discounts Watsco, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 10.0%, with a long-run terminal growth rate of 2.5%. About 71% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 11.2% annual revenue growth for WSO. Our base case instead compounds to about 4.2% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, WSO's modeled DCF value ranges from about $169.27 to $319.27 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Watsco, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of WSO's intrinsic value. Figures update as new filings and prices come in.
Every input behind WSO's DCF
| Input | Value |
|---|---|
| Base-year revenueWATSCO, INC. FY2025 10-K (accession 0001193125-26-082486): us-gaap:Revenues, FY2025 full year. | $7,239,290,000 |
| Base EBIT marginWATSCO, INC. FY2025 10-K (accession 0001193125-26-082486): us-gaap:OperatingIncomeLoss 720,347,000 / revenue 7,239,290,000 = 9.95%, FY2025. | 10.0% |
| Forecast revenue growthESTIMATEAssumption — TickerWorth's 5-year explicit forecast | 4% → 4% → 4% → 4% → 4% |
| Risk-free rateLive feed — US 10-year Treasury yield (^TNX) | 5.3% |
| BetaLive feed — yfinance, 5-year monthly beta vs the S&P 500 (clamped to 0.4–2.5) | 1.04 |
| Terminal growthESTIMATEAssumption — TickerWorth house default 2.5%, held below WACC | 2.5% |
| Diluted sharesWATSCO, INC. FY2025 10-K (accession 0001193125-26-082486): WeightedAverageNumberOfDilutedSharesOutstanding = 37,899,859 shares, FY2025. | 38M |
| Market priceDelayed quote · as of 2026-10-19 17:02 UTC | $294.19 |
Change WSO's assumptions
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What does Watsco, Inc. do?
What does it do?
Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies in the United States, Canada, Latin America, and the Caribbean. It distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. It operates in the Industrial Distribution industry (Industrials sector), headquartered in United States. The company employs roughly 6,950 people.
How does it make money?
The business turns $7.3B in annual revenue into profit. Out of every $100 of sales, about $11 is left as operating profit (operating margin of 10.9%), after a 28% gross margin on the products/services it sells. After all costs, taxes and interest, 6.5% of revenue becomes bottom-line net profit.
Is it financially healthy?
Financially it looks solid: carries modest debt (0.2× equity), comfortably covers its short-term bills (3.2× current ratio), and is currently profitable.
Who at WSO filed insider trades?
| Date | Insider | Relationship | What happened | Value | Filing |
|---|---|---|---|---|---|
| ALVAREZ CESAR L | Director | Option exercise | $803,450.00 | Form 4 for ALVAREZ CESAR L (opens sec.gov in a new tab) | |
| ALVAREZ CESAR L | Director | Open-market sale | $2,061,700.00 | Form 4 for ALVAREZ CESAR L (opens sec.gov in a new tab) | |
| Custer John Michael | Director | Option exercise | $433,886.76 | Form 4 for Custer John Michael (opens sec.gov in a new tab) | |
| Custer John Michael | Director | Shares withheld (tax) | $433,690.14 | Form 4 for Custer John Michael (opens sec.gov in a new tab) |
A disclosure, not a signal to trade. Source: SEC EDGAR (Form 4).
Common questions
What is WSO's intrinsic value?
TickerWorth's valuation lenses put Watsco, Inc. (WSO) between $95.32 and $325.72 per share, versus a market price of $294.19. They disagree too widely for us to state a single fair value, so we publish the range.
Is WSO overvalued or undervalued?
At $294.19 the price sits inside a range too wide to call either way. We don't call WSO overvalued or undervalued from a range this wide. This is an educational estimate, not advice.
What discount rate is used for WSO?
A WACC of 10.0% and a terminal growth rate of 2.5%.
Is Watsco stock undervalued?
TickerWorth's fair-value range for Watsco, Inc. (WSO) is $95.32 – $325.72 against a market price of $294.19. Too wide to call. We publish a range here, not one number, so we do not call it over- or undervalued. This is a model estimate, not investment advice.
Watsco (WSO) DCF valuation and fair value
Our fair-value range for Watsco, Inc. (WSO) is $95.32 – $325.72, built on a 10.0% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.
What growth is priced into Watsco stock?
Today's price implies revenue growth of 11.2% a year for 5 years; our model assumes 4.2% a year on average over the same horizon. This is a reverse DCF: it holds our cash-flow model's other inputs and solves for the revenue growth that makes the model equal today's price of $294.19. A model estimate, not investment advice.
Watsco (WSO) insider trading
The most recent insider filing (SEC Form 4) for Watsco, Inc. (WSO): ALVAREZ CESAR L, Director, option exercise on 2023-12-12. The latest filings are listed on this page. A disclosure, not a signal to trade.
Other ways into the coverage
Not investment advice. TickerWorth Score is a model output.
Educational tool. Every output reflects the assumptions shown — not a prediction and not investment advice. TickerWorth is not a licensed investment adviser, and these figures are estimates from public filings and market data that can be wrong.