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Watsco WSO

Watsco scores average on business quality (5.4 of 10). Here is why, in plain words, and what our sealed record shows.

Last price$279.90Oct 9, 2026
Business qualityAverage
Next earningsOct 27, 2026
Insiders, 90 daysQuiet

Why it matters

  1. What Watsco does

    Watsco distributes air conditioning, heating, and refrigeration equipment, earning its revenue by supplying contractors and dealers across North America. The business operates through a vast network focused on replacement markets where speed of delivery dictates contractor loyalty.

  2. What it does best

    Watsco dominates HVAC distribution by locking in contractors through proprietary digital tools and a massive footprint. With revenue at $7.3 billion, it outscales regional rivals while maintaining an ROE of 16.8%, easily beating WCC's 13.8% ROE.

  3. The main risk

    Topline contraction poses a direct threat as revenue dropped 5.0% recently, signaling weaker demand in core housing and commercial replacement cycles that directly compresses volume and margin.

Quality, check by check

Scored against its own industry, from company filings.

ProfitabilityWeak

Gross margin rests at 27.5% with an operating margin of 9.0%, showing stable performance despite top-line declines. Scale advantages help preserve margins during volume dips.

MoatStrong

Scale and entrenched contractor relationships form a durable moat, placing its ROE in the top quartile of its sector at 16.8%. Rivals cannot easily replicate its localized branch density within 1-2 years.

GrowthSlow

Revenue growth sits in the bottom decile of its sector at negative 5.0%, reversing historical gains and fading significantly compared to peers like FAST growing at 8.7%.

Financial healthStrong

With a debt-to-equity ratio near zero and a net cash position of $717 million, the balance sheet is pristine. Free cash flow reached $697 million, showing elite capital conversion getting stronger.

Insiders

Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.

No open market buys or unplanned sales by executives or directors.

Our sealed record on WSO

Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.

The first sealed verdicts appear here on Oct 11, 2026.

Questions

Is WSO a good business?

Watsco scores average on the Cluenex quality check (5.4 of 10), measured against its own industry. Profitability is weak, moat strong, growth slow and financial health strong.

Are insiders buying WSO?

In the last 90 days of SEC Form 4 filings: No open market buys or unplanned sales by executives or directors.

When does WSO report earnings?

Oct 27, 2026.

For members

See WSO today

  • Today's verdict on WSO, and why
  • Fair value with cautious, base and optimistic cases
  • The exact price that would change the verdict
  • Which stocks each signal names, the night it fires
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Cite this page: Cluenex, “Watsco (WSO)”, https://cluenex.com/stocks/wso/, data as of Oct 10, 2026.