Watsco, Inc. WSO.B
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Full analysis: 30 Jul 2026
Latest news check: 7 Jun 2026
General analysis — not personal advice.
HOLD
7/10
Confidence
Existing position can be maintained until margin trends become clearer.
Mixed signals from the earnings miss and strong balance sheet support a neutral stance.
Market sentiment
5/10
↓
Trend: Declining
The market focuses on the recent earnings miss and margin pressure, while long-term investors highlight the debt-free balance sheet and dividend history.
Price context
The stock trades around 363 USD after a decline of nearly 20 % from the 52-week high, reflecting short-term uncertainty around margins rather than deteriorating fundamentals.
Risk assessment
3/10
Dilution:
Low
Debt-free balance sheet and strong cash flow
Jurisdiction:
Low
Operations primarily in the USA
Execution:
Low
Historically strong acquisition track record
About the company
Watsco is North America's largest distributor of equipment, parts and supplies for heating, ventilation, air conditioning and refrigeration. The company operates around 690 locations and has a growing e-commerce business that accounts for a significant share of sales.
Sector:
HVAC/R distribution
Type:
Industrial
Next report
15 Oct 2026
Q3
Catalysts
Q4 2026
Q3 2026 report
High
Q4 2026
Jackson Supply integration
Medium
Horizon:
Bull case
Strong cash position, zero debt and dividend history provide support despite weaker quarterly results.
Bear case
Normalized pricing and lower gross margins have led to earnings misses and negative stock reaction.
Sensitivity analysis
| Factor | If it weakens | If it strengthens |
|---|---|---|
| A2L refrigerant transition | Transition is delayed or more costly → margin recovery is postponed and integration costs rise. | Transition proceeds smoothly → price increases are realized faster and gross margins stabilize. |
| Jackson Supply integration | Synergies fail to materialize or are delayed → expected revenue growth and margin improvements are not achieved. | Integration succeeds → new locations contribute to higher market share and profitability in the Sunbelt. |
We monitor these factors. Follow the company to get email when any of them hit.
Signal rationale (informational)
Mixed signals from the earnings miss and strong balance sheet support a neutral stance.
Recent news
- The Q2 2026 report showed lower-than-expected earnings due to normalized pricing and declining margins. The stock fell about 15 % after the report. The acquisition of Jackson Supply Company was completed on June 1, 2026.
Key figures
Revenue
Q2 2026
USD 2.1B
Revenue TTM
TTM
USD 7,239M
EBITDA
FY 2025
USD 812M
Cash
Q2 2026
USD 464M
Total debt
Q2 2026
USD 0.0M
Gross margin
Q2 2026
27.5%
Shares outstanding
Q2 2026
40.8M
Price & valuation
Last close
USD 319
Market Cap
USD 13.0B
1 week
+1.0 %
3 months
-29.6 %
12 months
-26.6 %
From 52w high
-29.6 %
From 52w low
+1.0 %
Exchange
NYSE
Type
Industrials
Sector
HVAC/R distribution
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Firelda provides general information and analysis, not personal investment advice. Content does not consider your financial situation or goals. Investments can rise and fall in value. Always do your own research.