Watsco (WSO)
NYSEIndustrialsIndustrial - DistributionSnapshot 2026-09-04
$315.13-0.08%
Close 2026-09-04 · 1-day change
NYSEIndustrialsIndustrial - DistributionSnapshot 2026-09-04
QuarterlyIQ Insights · WSO
What must go right, what could break, what the price assumes, and what evidence comes next.
The current health of the standing investment case.
Recent financial performance recently climbed back into the top half of its industry — confirming the recovery.
One-year growth currently built into the price, compared with our model's estimate.
| Measure | Marker shape | Value |
|---|---|---|
| Growth built into the price | circle | 6.4% |
| Our one-year growth estimate | diamond | 7.0% |
Growth built into the price is above our model estimate.
The price assumes 0.6 percentage points less one-year growth.
The one-year revenue growth assumption on Valuation.
For each item: what to watch, what would become a concern, and what would make it less concerning.
A reporting-risk estimate, not a forecast of the stock-price response.
Model as of 2026-09-04 · Compared with 18 industry peers · Company calendar date is not available
WSO — earnings miss
Dated 2026-07-29
Results of Operations and Financial Condition. On July 29, 2026, Watsco, Inc., a Florida corporation (the “Company”), issued a press release reporting its financial results for the quarter and six months ended June 30, 2026. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference in this
Why it matters: Strong revenue growth shows that the market is stable. It also shows good management.
Supportive ifQ2 revenue growth reported above 2% year over year.
Worry ifQ2 revenue growth reported below 0% year over year.
Why it matters: An increase would reflect strong cash flow and commitment to shareholder returns.
Supportive ifThere will be a dividend increase announcement in April 2027.
Worry ifNo dividend increase will be announced in April 2027.
Why it matters: A drop below this level would signal ongoing pricing pressures and cost challenges.
Worry ifGross profit margin for Q3 falls below 27%.
Less concerning ifGross profit margin for Q3 stays at or above 27%.
Why it matters: Stable or higher revenue shows Watsco's strength in tough market conditions.
Supportive ifQ2 revenue shows a year-over-year increase of at least 2% from Q2 2025.
Worry ifQ2 revenue goes down from last year or stays the same.
Why it matters: Better cash flow means the company runs more efficiently. It also shows better financial health.
Supportive ifOperating cash flow for Q2 is over $19 million. This shows recovery from Q1.
Worry ifOperating cash flow is low or drops. This shows ongoing operational problems.
Why it matters: Keeping dividends shows good financial health. Cuts may mean cash flow issues.
Supportive ifAnnouncement of dividend payments for the next quarter.
Worry ifAnnouncement of a dividend cut or stop.
Why it matters: Closing this deal would expand Watsco's market presence and enhance its growth potential.
Supportive ifThe deal closes successfully. It will be part of Watsco's operations by Q3 2026.
Worry ifThe acquisition fails to close or faces significant delays beyond Q3 2026.
Why it matters: An increase shows Watsco's commitment to giving cash back to shareholders. It shows financial strength.
Supportive ifAnnouncement of a dividend increase above the current $13.20 per share.
Worry ifNo increase in dividends was announced during Q3.
Why it matters: Watsco's focus on dividends shows it is financially healthy. Changes may show new priorities for spending.
Watch forManagement says they plan to keep or raise dividends in future updates.
Also watch forManagement says there will be a cut or pause in dividends.
Why it matters: Steady cash flow after the deal shows that the company is integrating well. It also shows efficient operations.
Watch forOperating cash flow remains above $500 million for Q2 2026.
Also watch forOperating cash flow drops below $400 million for Q2 2026.
Why it matters: A stable gross profit margin shows good pricing and cost control. This is important for making money.
Supportive ifGross profit margin for Q3 exceeds 27%, showing recovery from Q2's 27.5%.
Worry ifGross profit margin is below 27%. This shows ongoing pressure on pricing or costs.
Why it matters: Changes in pricing can affect revenue and margins. This shows market trends and cost issues.
Watch forAverage selling prices for HVAC equipment increase beyond the recent 9% rise.
Also watch forAverage selling prices drop or stay the same. This shows possible pricing pressure.
Why it matters: Using less cash flow helps manage working capital. This shows better operations.
Supportive ifCash flow use reported below $19 million for Q2.
Worry ifCash flow use reported above $19 million for Q2.
Why it matters: Stable dividends show the company is doing well. They also show care for shareholders.
Supportive ifManagement confirms the dividend remains at $3.0 per share for the next quarter.
Worry ifManagement cuts or stops the dividend payment.
Why it matters: How well Jackson Supply does can support Watsco's acquisition plan and growth in key markets.
Watch forJackson Supply reports revenue growth exceeding $60 million in the next quarter.
Also watch forJackson Supply's revenue growth falls below $60 million in the next quarter.
Why it matters: A slowdown means fewer contractors are using digital tools. This could hurt future growth.
Worry ifE-commerce sales growth drops below 10% year over year.
Less concerning ifE-commerce sales growth remains at or above 10% year over year.
Why it matters: The transition affects a large portion of products sold and could impact revenue and margins.
Watch forSales of A2L products rise a lot, helping revenue growth.
Also watch forSales of A2L products drop, showing problems in the transition.
Why it matters: High inventory levels may mean problems with demand or supply chain issues.
Worry ifInventory levels are over $1.9 billion in Q3.
Less concerning ifInventory levels stay below $1.9 billion in Q3.
Why it matters: Closing this deal would expand Watsco's market presence and add $230 million in sales.
Supportive ifThe acquisition closes successfully by the end of Q2 2026.
Worry ifThe deal is delayed or canceled because of rules or money problems.
Why it matters: Strong e-commerce growth shows Watsco's technology investments are paying off. This can boost overall revenue.
Supportive ifE-commerce sales growth exceeds 10% year over year in the next quarterly report.
Worry ifE-commerce sales growth falls below 10% year over year.
Why it matters: Earnings above this level would show strong performance and stability in the market.
Supportive ifEarnings per share for Q3 exceed $4.50.
Worry ifEarnings per share for Q3 fall below $4.00.
Historical relationships that met the evidence threshold. They do not prove cause or forecast a move.
Usually moved in the same direction.
Price observations: 365 days
Usually moved in the opposite direction.
Price observations: 365 days
Most sensitive to the broad stock market and Fed net liquidity.
Based on historical daily prices through 2026-09-04.
Past price behavior in dollars on a $10,000 position. This does not measure permanent business risk.
How much price usually moves either way.
A larger daily loss that occurred about once in every 20 trading days.
Deepest peak-to-trough drop in the last year.
| Measure | Value | Meaning |
|---|---|---|
| Typical day | ±$125 on $10,000 · ±1.3% | How much price usually moves either way. |
| Bad day | $344 loss on $10,000 · 3.4% | A larger daily loss that occurred about once in every 20 trading days. |
| Largest peak-to-trough drop in the past year | $3,383 loss on $10,000 · 33.8% | Deepest peak-to-trough drop in the last year. |
Past year. 1.00 means similar movement; 1.20 means about 20% more.
Past year. 1.00 means similar movement to the sector. This is secondary context.
Latest 30 trading days, shown as an annual percentage.
Latest 252 trading days, shown as an annual percentage.
20-trading-day average in US dollars.
Trading days used by the source risk snapshot.
Past results, not a forecast. Not investment advice.
Use the underlying financial and sector pages to investigate the cause.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.