Watsco (WSO)
Market Price (12/4/2025): $349.81 | Market Cap: $13.2 BilSector: Industrials | Industry: Trading Companies & Distributors
Watsco (WSO)
Market Price (12/4/2025): $349.81Market Cap: $13.2 BilSector: IndustrialsIndustry: Trading Companies & Distributors
Investment Highlights
Why It Matters
Which of these 2 stories sounds closer for this stock?
1. Generates cash flow
The stock generated 4% or more of the share price (called cash flow yield), and shows moderate 10-15% or more growth.
2. Riding a trend
Think Tesla during the pandemic of 2020 when EVs were riding a cultural high, or Nvidia in the current AI boom, or even Figma. These companies don’t have enough yield, or, enough growth, or both - however - they are riding a trend. They have momentum. These can be more volatile - they don’t have the floor of strong cash flow
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.4%, Dividend Yield is 3.0% | Weak multi-year price returns2Y Excs Rtn is -52%, 3Y Excs Rtn is -30% | Weak revenue growthRev Chg 3Y AvgRevenue Change % averaged over trailing 3 years is 1.0%, Rev Chg QQuarterly Revenue Change % is -4.3% |
| Low stock price volatilityVol 12M is 33% | ||
| Megatrend and thematic driversMegatrends include Electrification of Everything, Sustainable & Green Buildings, and Smart Buildings & Proptech. Themes include Heat Pump Technology, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.4%, Dividend Yield is 3.0% |
| Low stock price volatilityVol 12M is 33% |
| Megatrend and thematic driversMegatrends include Electrification of Everything, Sustainable & Green Buildings, and Smart Buildings & Proptech. Themes include Heat Pump Technology, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -52%, 3Y Excs Rtn is -30% |
| Weak revenue growthRev Chg 3Y AvgRevenue Change % averaged over trailing 3 years is 1.0%, Rev Chg QQuarterly Revenue Change % is -4.3% |
Valuation, Metrics & Events
WSO Stock
Why The Stock Moved
Qualitative Assessment
AI Generated Analysis | Feedback
1. Q4 2023 Earnings Miss and Margin Contraction
Watsco reported dismal fourth-quarter 2023 results, with both earnings and revenues missing the Zacks Consensus Estimate. The company's gross margin contracted by 50 basis points year-over-year to 27.4%, and its operating margin also declined by 50 basis points to 10.9%. High costs and expenses further impacted the bottom line.
2. Decline in Specific Product Sales in Q4 2023
In the fourth quarter of 2023, while total revenues inched up slightly, sales of HVAC equipment were flat year-over-year, and sales of other HVAC products dropped by 6%. Sales from commercial refrigeration products also declined by 3% compared to the prior-year quarter.
Show more
Watsco reported dismal fourth-quarter 2023 results, with both earnings and revenues missing the Zacks Consensus Estimate. The company's gross margin contracted by 50 basis points year-over-year to 27.4%, and its operating margin also declined by 50 basis points to 10.9%. High costs and expenses further impacted the bottom line.
2. Decline in Specific Product Sales in Q4 2023
In the fourth quarter of 2023, while total revenues inched up slightly, sales of HVAC equipment were flat year-over-year, and sales of other HVAC products dropped by 6%. Sales from commercial refrigeration products also declined by 3% compared to the prior-year quarter.
Show more
Stock Movement Drivers
Return vs. Risk
Price Returns Compared
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| WSO Return | 31% | 42% | -18% | 77% | 13% | -26% | 126% |
| Peers Return | 20% | 85% | 24% | 35% | 1% | 8% | 306% |
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 16% | 112% |
Monthly Win Rates [3] | |||||||
| WSO Win Rate | 50% | 58% | 25% | 67% | 58% | 50% | |
| Peers Win Rate | 57% | 72% | 43% | 55% | 53% | 54% | |
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 70% | |
Max Drawdowns [4] | |||||||
| WSO Max Drawdown | -22% | -0% | -26% | 0% | -11% | -30% | |
| Peers Max Drawdown | -45% | -6% | -23% | -11% | -20% | -16% | |
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | |
[1] Cumulative total returns since the beginning of 2020
[2] Peers: PH, GWW, RS, WHR, HDSN. See WSO Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2025 data is for the year up to 12/3/2025 (YTD)
How Low Can It Go
| Event | WSO | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -28.2% | -25.4% |
| % Gain to Breakeven | 39.2% | 34.1% |
| Time to Breakeven | 225 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -24.3% | -33.9% |
| % Gain to Breakeven | 32.1% | 51.3% |
| Time to Breakeven | 107 days | 148 days |
| 2018 Correction | ||
| % Loss | -30.7% | -19.8% |
| % Gain to Breakeven | 44.3% | 24.7% |
| Time to Breakeven | 570 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -50.5% | -56.8% |
| % Gain to Breakeven | 102.0% | 131.3% |
| Time to Breakeven | 1057 days | 1480 days |
Compare to PH, GWW, RS, WHR, HDSN
In The Past
Watsco's stock fell -28.2% during the 2022 Inflation Shock from a high on 12/15/2021. A -28.2% loss requires a 39.2% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth over time.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
Latest Trefis Analyses
| Title | |
|---|---|
| ARTICLES |
Trade Ideas
Select past ideas related to WSO. For more, see Trefis Trade Ideas.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 11212025 | CNM | Core & Main | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 9.5% | 9.5% | -1.6% |
| 11212025 | VRRM | Verra Mobility | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.2% | 3.2% | -1.2% |
| 11212025 | LII | Lennox International | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 7.5% | 7.5% | 0.0% |
| 11212025 | ADP | Automatic Data Processing | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 2.8% | 2.8% | -1.2% |
| 11212025 | CW | Curtiss-Wright | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 0.0% | 0.0% | 0.0% |
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 11212025 | CNM | Core & Main | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 9.5% | 9.5% | -1.6% |
| 11212025 | VRRM | Verra Mobility | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.2% | 3.2% | -1.2% |
| 11212025 | LII | Lennox International | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 7.5% | 7.5% | 0.0% |
| 11212025 | ADP | Automatic Data Processing | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 2.8% | 2.8% | -1.2% |
| 11212025 | CW | Curtiss-Wright | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 0.0% | 0.0% | 0.0% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons for Watsco
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 321.94 |
| Mkt Cap | 14.3 |
| Rev LTM | 14,743 |
| Op Inc LTM | 905 |
| FCF LTM | 590 |
| FCF 3Y Avg | 806 |
| CFO LTM | 789 |
| CFO 3Y Avg | 1,104 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | -0.8% |
| Rev Chg 3Y Avg | -3.0% |
| Rev Chg Q | 4.9% |
| QoQ Delta Rev Chg LTM | 1.2% |
| Op Mgn LTM | 10.5% |
| Op Mgn 3Y Avg | 12.6% |
| QoQ Delta Op Mgn LTM | -0.1% |
| CFO/Rev LTM | 9.5% |
| CFO/Rev 3Y Avg | 11.2% |
| FCF/Rev LTM | 7.0% |
| FCF/Rev 3Y Avg | 8.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 14.3 |
| P/S | 1.9 |
| P/EBIT | 18.0 |
| P/E | 23.3 |
| P/CFO | 18.3 |
| Total Yield | 5.0% |
| Dividend Yield | 1.3% |
| FCF Yield 3Y Avg | 4.0% |
| D/E | 0.1 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 1.8% |
| 3M Rtn | -6.4% |
| 6M Rtn | -2.3% |
| 12M Rtn | -12.8% |
| 3Y Rtn | 43.1% |
| 1M Excs Rtn | 1.8% |
| 3M Excs Rtn | -13.5% |
| 6M Excs Rtn | -17.1% |
| 12M Excs Rtn | -27.3% |
| 3Y Excs Rtn | -28.9% |
Comparison Analyses
Segment Financials
Revenue by Segment
| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Air conditioning, heating, and refrigeration (HVAC) equipment | 5,026 | 4,947 | 4,333 | 3,488 | 3,244 |
| Other air conditioning, heating, and refrigeration (HVAC) products | 1,967 | 2,037 | 1,758 | 1,415 | 1,336 |
| Commercial refrigeration products | 291 | 291 | 188 | 152 | 191 |
| Total | 7,284 | 7,274 | 6,280 | 5,055 | 4,770 |
Returns Analyses
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 9302025 | 11072025 | 10-Q 9/30/2025 |
| 6302025 | 8082025 | 10-Q 6/30/2025 |
| 3312025 | 5092025 | 10-Q 3/31/2025 |
| 12312024 | 2282025 | 10-K 12/31/2024 |
| 9302024 | 11012024 | 10-Q 9/30/2024 |
| 6302024 | 8022024 | 10-Q 6/30/2024 |
| 3312024 | 5032024 | 10-Q 3/31/2024 |
| 12312023 | 2232024 | 10-K 12/31/2023 |
| 9302023 | 11032023 | 10-Q 9/30/2023 |
| 6302023 | 8032023 | 10-Q 6/30/2023 |
| 3312023 | 5052023 | 10-Q 3/31/2023 |
| 12312022 | 2242023 | 10-K 12/31/2022 |
| 9302022 | 11032022 | 10-Q 9/30/2022 |
| 6302022 | 8042022 | 10-Q 6/30/2022 |
| 3312022 | 5052022 | 10-Q 3/31/2022 |
| 12312021 | 2252022 | 10-K 12/31/2021 |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |