NYSE: WSO ยท Industrial Distribution
Watsco (WSO) fair value: undervalued or overvalued?
As of 19 Sep 2026, Faircurve's model values Watsco (WSO) at $300.91 a share. The stock last closed at $317.69, which puts the model's fair value 5.3% below the price. On the model's bands that reads as Fairly valued.
Revalued . Price is the close of 21 Sep 2026. Watsco, Inc.
What price range does the model give WSO?
The calibrated range for WSO over 63 trading days is $291.32 to $374.15. It sits around the last close, and its width comes from the volatility that WSO's own options imply (36% a year), calibrated weekly against realised prices (n = 2,982 past valuations, refreshed 19 Sep 2026). Ranges built this way held the price 60% of the time at this horizon. The fair value is the model's opinion and rides beside the range. It is not the centre of it.
The model's own simulated range, from the 20th to the 80th percentile of its runs, is $249.91 to $358.31. In 43% of the simulations the fair value came out above the price the model ran on.
How does WSO score on business quality?
Watsco's overall quality score is 64 out of 100. Each factor below is a score against comparable companies, not a percentile of the metric beside it.
| Factor | Score (0 to 100) | Headline measure | Peer median |
|---|---|---|---|
| ProfitabilityReturn on invested capital against the peer group, with a bonus for an improving trend. | 62 | 14.8%ROIC | 12.5% |
| Earnings qualityHow much of reported profit is cash: free cash flow to net income, and the accrual ratio (the share of earnings that is not cash). | 89 | 1.47xFCF / net income | 1.16x |
| Growth qualityTrailing revenue growth, forward growth from consensus, and the direction of analyst estimate revisions. | 27 | -5.0%Revenue growth, trailing | 5.8% |
| Capital disciplineReinvestment efficiency (capital spending per unit of revenue) and net buybacks. | 46 | 0.0%Net buybacks / market value | 2.7% |
| Balance sheetNet debt to EBITDA and interest coverage. | 85 | 0.23xNet debt / EBITDA | 1.92x |
| StabilityDownside volatility of the EBITDA margin over the last five years. | 92 | 0.3 ptsEBITDA margin downside volatility, 5y | 0.9 pts |
How does WSO compare with similar companies?
The companies in industrial distribution closest to Watsco in market value, each on the same model and the same date.
| Company | Last close | Model fair value | Gap | Model verdict |
|---|---|---|---|---|
| AIT Applied Industrial Technologies, Inc. | $320.39 | $292.79 | -8.6% | Fairly valued |
| WCC WESCO International, Inc. | $355.31 | $347.77 | -2.1% | Fairly valued |
| CNM Core & Main, Inc. | $43.06 | $59.78 | +38.8% | Undervalued |
| MSM MSC Industrial Direct Co., Inc. | $121.63 | $112.93 | -7.2% | Fairly valued |
| POOL Pool Corporation | $167.92 | $170.98 | +1.8% | Fairly valued |
| REZI Resideo Technologies, Inc. | $18.81 | $16.72 | -11.1% | Fairly valued |
| FERG Ferguson plc | $216.14 | $251.20 | +16.2% | Undervalued |
| FAST Fastenal Company | $49.65 | $41.35 | -16.7% | Overvalued |
All industrial distribution stocks ranked by gap to fair value
When does WSO report earnings, and how has the stock reacted?
Watsco's next earnings report is scheduled for 28 Oct 2026. Companies can move their dates.
Options prices on 21 Sep 2026 imply a move of about 7.3% in either direction through the nearest expiry, about 24 days out. That is the size the market is pricing, not a direction. WSO's 30 day implied volatility works out to about 10.3% over one month.
How WSO moved around its last 8 earnings reports
Each move runs from the last close before the report to the first close after it, so it covers companies that report before the open and after the close. The median size across these 8 reports, ignoring direction, was 4.4%.
| Report date | Two session move |
|---|---|
| 29 Jul 2026 | -15.4% |
| 28 Apr 2026 | -6.2% |
| 17 Feb 2026 | +0.3% |
| 29 Oct 2025 | 0.0% |
| 30 Jul 2025 | -3.0% |
| 23 Apr 2025 | -15.2% |
| 18 Feb 2025 | +5.8% |
| 23 Oct 2024 | -1.3% |
Watsco at a glance
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.
- Market value
- $12.8B
- Sector
- Industrials
- Industry
- Industrial Distribution
- Revenue expected, next twelve months
- $7.9B
- Consensus revenue growth, next fiscal year
- +4.5%
- Analysts with estimates
- 10
- Beta to the US market
- 1.04
- First valued by Faircurve
- 11 Jul 2026
How the fair value is worked out: the model prices Watsco on the value of the whole business, debt included, against the operating profit analysts expect next year (forward EV/EBITDA), runs 2,000 simulations across its inputs and takes the midpoint. The full method is documented here.
What changed in the latest valuation?
On 12 Sep 2026 the model's fair value for WSO was $298.70. As of 19 Sep 2026 it is $300.91, a change of +0.7%. The model revalues every stock it covers each week, and again after an earnings report.
Questions about Watsco's valuation
Is Watsco stock undervalued or overvalued?
On Faircurve's model, WSO reads as Fairly valued as of 19 Sep 2026. The model's fair value is $300.91 a share against a last close of $317.69, a gap of -5.3%.
What is WSO's fair value?
$300.91 a share as of 19 Sep 2026, the midpoint of 2,000 simulations. The model's own 20th to 80th percentile range is $249.91 to $358.31.
What price range does the model give WSO?
$291.32 to $374.15 over 63 trading days. Ranges built this way held the price 60% of the time across 2,982 past valuations, refreshed 19 Sep 2026.
When does Watsco report earnings next?
The next report is scheduled for 28 Oct 2026. Companies can move their dates.
How much has WSO moved on past earnings reports?
Across its last 8 reports the median two session move was 4.4%, ignoring direction. The largest was -15.4% around the report of 29 Jul 2026.
How confident is the model in this valuation?
Model confidence for WSO is high. The grade looks at how complete the inputs are, how many comparable companies there are and how closely they agree, and how wide the range of outcomes is. It is not a probability that the fair value is right, or that the price reaches it.