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Watts Water Technologies (WTS) Risk Analysis

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Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as ā€œRisk Factorsā€. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or ā€œforeign private issuerā€ reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanksā€™ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Watts Water Technologies disclosed 48 risk factors in its most recent earnings report. Watts Water Technologies reported the most risks in the ā€œLegal & Regulatoryā€ category.

Risk Overview Q2, 2026

Source: the company's latest filing for the period ended Jun 28, 2026, filed Aug 06, 2026

Risk Distribution
48Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Watts Water Technologies disclosed risks per quarterNo. of Risks1020304050Q3Q4Q12023Q2Q3Q4Q12024Q2Q3Q4Q12025Q2Q4Q12026Q2Showing: Q4, 2025
Risks removedRisks addedRisks changedWatts Water Technologies Risk Factors
New Risk (1)
  • Corporate Activity and Growth - Risk 1
    Our ability to achieve savings through our restructuring and business transformation activities may be adversely affected by management's ability inability to fully execute such plans as a result of local regulations, geo-political risk or other factors within or beyond the control of management.

    We have implemented a number of restructuring and business transformation activities, which include steps that we believe are necessary to enhance the value and performance of the Company, including reducing operating costs and increasing efficiencies throughout our manufacturing, sales and distribution footprint. Factors within the control of management, or factors beyond management's control such as local labor regulations or legal or political intervention, may change the total estimated costs or the timing of when the savings will be achieved under the plans. Further, if we are not successful in completing the restructuring or business transformation activities timely, or if additional or unanticipated issues such as labor disruptions, inability to retain key personnel during and after the transformation or higher exit costs arise, our expected cost savings may not be met and our operating results could be negatively affected. In addition, our restructuring and transformation activities may place substantial demands on our management, which could lead to diversion of management's attention from other business priorities and result in a reduced customer focus.

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade
Tech & Innovation (1)
Legal & Regulatory (2)
Production (1)

Risk Highlights Q2, 2026

Main Risk Category
Legal & Regulatory
With 14 Risks
Number of Disclosed Risks
48
+24
From last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Jun 2026
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

we are subject to and impacted by environmental, health and safety laws and regulations, which could result in costs, liabilities and impacts to our business operations.impacts to our business operationswe are subject to risks related to product defects, which could result in product recalls and could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated due to the unenforceability of liability limitations.subject us to warranty claimsconversion and subsequent sale of a significant number of shares of our class b common stock could adversely affect the market price of our class a common stock.market price of our classwe are subject to risks related to product defects, which could result in product recalls and could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated due to the unenforceability of liability limitations.excess of our warranty provisionsimplementation of our strategic initiatives, including acquisitions and dispositions, and integration of acquired businesses may not be successful, which could affect our ability to increase our revenues or our profitability.implementation of our strategic initiativeseconomic cycles, particularly those involving reduced levels of commercial and residential starts and remodeling, may have adverse effects on our revenues and operating results.involving reduced levels of commercialour ability to achieve savings through our restructuring and business transformation activities may be adversely affected by management's inability to fully execute such plans as a result of local regulations, geo-political risk or other factors within or beyond the control of management.our ability to achieve savingsthe requirements to evaluate goodwill, indefinite-lived intangible assets and long-lived assets for impairment may result in a write-off of all or a portion of our recorded amounts, which would negatively affect our operating results and financial condition.portion of our recorded amountsthe loss or financial instability of major customers could have an adverse effect on our results of operations.financial instability of major customersour operating results could be negatively affected by changes in tax rates, the adoption of new tax legislation, or exposure to additional tax liabilities.exposure to additional tax liabilities

Risk Factors Full Breakdown - Total Risks 48

Regulation2 | 4.2%
  • Regulation - Risk 1
    Changes in regulations or standards could adversely affect our business.

    Our products and business are subject to a wide variety of statutory, regulatory and industry standards and requirements. A significant change to regulatory requirements, whether federal, foreign, state or local, or to industry standards, could substantially increase manufacturing costs, impact the size and timing of demand for our products, require us to manufacture with alternative technologies or materials, or put us at a competitive disadvantage, any of which could harm our business and have a material adverse effect on our financial condition, results of operations and cash flow.

  • Regulation - Risk 2
    Changes in regulations or standards could adversely affect our business.

    Our products and business are subject to a wide variety of statutory, regulatory and industry standards and requirements. A significant change to regulatory requirements, whether federal, foreign, state or local, or to industry standards, could substantially increase manufacturing costs, impact the size and timing of demand for our products, require us to manufacture with alternative technologies or materials, or put us at a competitive disadvantage, any of which could harm our business and have a material adverse effect on our financial condition, results of operations and cash flow.

Litigation & Legal Liabilities2 | 4.2%
Taxation & Government Incentives2 | 4.2%
Environmental / Social8 | 16.7%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are ā€œRisk Factorsā€?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for ā€œforeign private issuersā€. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in ā€œplain Englishā€ so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a companyā€™s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights ā€“ risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing ā€“ risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth ā€“ risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities ā€“ risks related to litigation/ lawsuits against the company. Regulation ā€“ risks related to compliance, GDPR, and new legislation. Environmental / Social ā€“ risks related to environmental regulation and to data privacy. Taxation & Government Incentives ā€“ risks related to taxation and changes in government incentives. 3. Production Costs ā€“ risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain ā€“ risks related to the companyā€™s suppliers. Manufacturing ā€“ risks related to the companyā€™s manufacturing process including product quality and product recalls. Human Capital ā€“ risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D ā€“ risks related to innovation and new product development. Technology ā€“ risks related to the companyā€™s reliance on technology. Cyber Security ā€“ risks related to securing the companyā€™s digital assets and from cyber attacks. Trade Secrets & Patents ā€“ risks related to the companyā€™s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand ā€“ risks related to the demand of the companyā€™s goods and services including seasonality, reliance on key customers. Competition ā€“ risks related to the companyā€™s competition including substitutes. Sales & Marketing ā€“ risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation ā€“ risks related to the companyā€™s brand and reputation. 6. Macro & Political Economy & Political Environment ā€“ risks related to changes in economic and political conditions. Natural and Human Disruptions ā€“ risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations ā€“ risks related to the global nature of the company. Capital Markets ā€“ risks related to exchange rates and trade, cryptocurrency.