An update from Watsco ( (WSO) ) is now available.
In the first quarter of 2025, Watsco experienced a 2% decrease in revenues to $1.53 billion, with a flat gross profit of $430 million and improved gross profit margin. The company is undergoing a large-scale product transition due to regulatory changes affecting 55% of its sales, transitioning to HVAC systems with lower global warming properties. Despite a decline in international sales, the U.S. residential replacement market saw a 10% increase, supported by new customer acquisition and improved product mix. Watsco’s strong balance sheet and strategic investments in technology and inventory position it well for future growth, with expectations of resilient demand in the upcoming selling season.
Spark’s Take on WSO Stock
According to Spark, TipRanks’ AI Analyst, WSO is a Outperform.
Watsco’s overall score reflects its strong financial performance, particularly in cash flow generation and balance sheet management, which are key strengths. The company’s commitment to growth through technology and strategic acquisitions further supports its stock value. However, valuation concerns due to a high P/E ratio and some technical indicators suggest a cautious outlook. The positive earnings call and corporate events, such as the dividend increase, reinforce confidence in Watsco’s long-term growth potential.
To see Spark’s full report on WSO stock, click here.
More about Watsco
Watsco, Inc. is a leading distributor in the HVAC/R marketplace, serving over 375,000 contractors, technicians, and installers from 693 locations across the U.S., Canada, and Latin America. The company has achieved a 19% compounded annual growth rate in total-shareholder-return since entering distribution in 1989, driven by organic growth and the acquisition of 71 businesses. Watsco is known for its strong financial position, industry-leading technology, and scale, which provide a competitive advantage.
YTD Price Performance: 7.39%
Average Trading Volume: 284,773
Technical Sentiment Signal: Strong Sell
Current Market Cap: $20.34B
See more insights into WSO stock on TipRanks’ Stock Analysis page.