NYSE: WSO · Industrial Distribution
Watsco (WSO) fair value: undervalued or overvalued?
As of 31 Oct 2026, Faircurve's model values Watsco (WSO) at $289.79 a share. The stock last closed at $311.14, which puts the model's fair value 6.9% below the price. On the model's bands that reads as Fairly valued.
Revalued . Price is the close of 5 Nov 2026. Watsco, Inc.
The report adds the live price, the chart against the range the options market prices, the next earnings date and the analysts' consensus. No account needed.
This week, in three parts
What happenedThe run of 31 Oct 2026 moved the fair value from $303.86 to $289.79 (-4.6%). Analysts cut their next-twelve-month EBITDA estimates: most of the move.
What the model makes of itThe price of $311.14 is 6.9% above it: Fairly valued, on a high evidence grade.
What's nextNext report on 16 Feb 2027. Options prices imply a move of about 11% either way over the next month. The next weekly run is on Saturday 7 Nov 2026.
What price range does the model give WSO?
The calibrated range for WSO over 63 trading days is $276.57 to $359.58. It sits around the last close, and its width comes from the volatility that WSO's own options imply (40% a year), calibrated weekly against realised prices (n = 6,661 past valuations, refreshed 31 Oct 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 $241.12 to $344.57. In 41% of the simulations the fair value came out above the price the model ran on.
Faircurve Insights · 31 Oct 2026
Watsco, Inc. distributes air conditioning, heating and refrigeration equipment, and related parts and supplies. It operates in the United States, Canada, Latin America and the Caribbean.
Faircurve's model put the fair value at $289.79 a share on 31 Oct 2026, the midpoint of 2,000 simulations. That is down 4.6% from $303.86 on the previous run, on 24 Oct 2026. In the model's words, analysts cut their next-twelve-month EBITDA estimates: most of the move. The calibrated range over 63 trading days is $276.57 to $359.58. Ranges built this way, calibrated weekly against realised prices across 6,661 past valuations, held the price 60% of the time at this horizon. The model grades the evidence High, based on input completeness, the number and agreement of comparable companies, and the width of possible outcomes. The grade does not say whether the fair value is right.
Watsco's overall quality score is 66 out of 100, its composite of six factors scored against comparable companies. Balance sheet and Stability each score 100. Net debt to EBITDA is 0.07x against a peer median of 2.24x. Growth quality scores 32, with trailing revenue growth of -5.0% against a peer median of 4.5%. The model compares Watsco with WESCO International, Core & Main, Pool Corporation, MSC Industrial Direct, Ferguson Enterprises and Resideo Technologies. Applied Industrial Technologies and Dnow carry no verdict on this date.
Written from the figures on this page for the 31 Oct 2026 valuation and checked by rule before publishing: every number is one printed here, no forecast, no instruction. The price, the gap and the verdict are the page's own and change daily. Not a recommendation.
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When does WSO report earnings, and how has the stock reacted?
Watsco's next earnings report is scheduled for 16 Feb 2027. Companies can move their dates.
Options prices on 5 Nov 2026 imply a move of about 6.6% in either direction through the nearest expiry, about 14 days out. That is the size the market is pricing, not a direction. WSO's 30 day implied volatility works out to about 11.4% over one month.
Around its last 8 reports: what the options market priced, and what followed
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 WSO's last 8 reports, ignoring direction, was 3.9%.
What the options market has priced for a month's move in WSO
How does WSO score on business quality?
Watsco's overall quality score is 66 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. | 60 | 14.9%ROIC | 12.4% |
| 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). | 85 | 1.42xFCF / net income | 0.83x |
| Growth qualityTrailing revenue growth, forward growth from consensus, and the direction of analysts' rating changes. | 32 | -5.0%Revenue growth, trailing | 4.5% |
| Capital disciplineReinvestment efficiency (capital spending per unit of revenue) and net buybacks. | 45 | 0.0%Net buybacks / market value | 2.8% |
| Balance sheetNet debt to EBITDA and interest coverage. | 100 | 0.07xNet debt / EBITDA | 2.24x |
| StabilityDownside volatility of the EBITDA margin over the last five years. | 100 | 0.3 ptsEBITDA margin downside volatility, 5y | 1.0 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. | $280.90 | $297.48 | +5.9% | Data under review |
| WCC WESCO International, Inc. | $286.47 | $336.59 | +17.5% | Undervalued |
| CNM Core & Main, Inc. | $46.95 | $61.75 | +31.5% | Undervalued |
| POOL Pool Corporation | $216.66 | $203.28 | -6.2% | Fairly valued |
| MSM MSC Industrial Direct Co., Inc. | $110.95 | $125.85 | +13.4% | Fairly valued |
| FERG Ferguson Enterprises Inc. | $235.65 | $244.69 | +3.8% | Fairly valued |
| DNOW Dnow Inc. | $13.72 | $14.84 | +8.2% | Low evidence grade |
| REZI Resideo Technologies, Inc. | $19.59 | $17.23 | -12.0% | Fairly valued |
What the comparable companies' multiples alone would give for WSO, the peer-implied price, is $271.76 a share on this run. The fair value weighs that against the company's own multiple.
All industrial distribution stocks ranked by gap to fair value
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
- $12.6B
- Sector
- Industrials
- Industry
- Industrial Distribution
- Revenue expected, next twelve months
- $8.3B
- Consensus revenue growth, next fiscal year
- +5.7%
- Analysts with estimates
- 7
- Beta to the US market
- 0.79
- First valued by Faircurve
- 11 Jul 2026
At the close of 5 Nov 2026, 55.1% of the 1,060 graded US stocks the model covers traded below the model's fair value. WSO was not among them.
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 24 Oct 2026 the model's fair value for WSO was $303.86. As of 31 Oct 2026 it is $289.79, a change of -4.6%. Analysts cut their next-twelve-month EBITDA estimates: most of the move. 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 31 Oct 2026. The model's fair value is $289.79 a share against a last close of $311.14, a gap of -6.9%.
What is WSO's fair value?
$289.79 a share as of 31 Oct 2026, the midpoint of 2,000 simulations. The model's own 20th to 80th percentile range is $241.12 to $344.57.
What price range does the model give WSO?
$276.57 to $359.58 over 63 trading days. Ranges built this way held the price 60% of the time across 6,661 past valuations, refreshed 31 Oct 2026.
When does Watsco report earnings next?
The next report is scheduled for 16 Feb 2027. 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 3.9%, ignoring direction. The largest was -15.4% around the report of 29 Jul 2026.
How confident is the model in this valuation?
The model's evidence grade 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.
The model's own ideas on WSO
The model holds no idea open on WSO today. Signed-in readers see the rule each idea runs on, the floor and the exit level the model set and its time limit, and the model's closed ideas on WSO with their outcomes. A free account is enough.