Waterco Limited (WAT) AI Stock Analysis

• Market Cap: AU$242.63M
• Dividend Yield: 2.17%
• Average Volume (3M): 233.00
• Price to Earnings (P/E): 19.0
• Beta (1Y): 0.15
• Revenue Growth: 44.28%
• EPS Growth: -0.27%
• Country: AU
• Employees: 989
• Sector: Utilities
• Sector Strength: 75
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.17
• Shares Outstanding: 35,163,937
• 10 Day Avg. Volume: 288
• 30 Day Avg. Volume: 233
• PEG Ratio: -2.54
• Price to Book (P/B): 1.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.37
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$8.00
• Price Target Upside: 15.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: AU$7.50 ▲(8.70%Upside)

Waterco Limited demonstrates strong financial performance with significant revenue growth and robust profit margins, driving a high component score. However, the technical analysis presents mixed signals, with the stock being potentially overbought. The valuation is reasonable, but the P/E ratio indicates limited upside potential. The absence of recent earnings call data or notable corporate events means these factors do not influence the overall score.

Waterco Limited Business Overview & Revenue Model

Company Description

Waterco Limited engages in the manufacture, wholesale, and export of equipment and accessories in the swimming pool, spa pool, spa bath, rural pump, and water treatment industries in Australia, New Zealand, Asia, North America, and Europe. It also manufactures and sells solar heating systems for swimming pools and pre-heat industrial solar systems. The company's pool and spa products, including mineral salts, mineral ozone, chlorine free spas, pool cleaning minerals, pumps, filters, filter media, commercial chemical dosers, heating products, salt water chlorinators, controllers and automation products, pool lighting products, suction and robotic cleaners, recirculation accessories, blowers and valves, spa equipment, chemical pool products, and maintenance accessories, as well as commercial filters, pumps, heating, and accessories. Its water treatment products include commercial filter media and cooling water filtration products, cartridge and bag filters, centrifugal filters, and fiberglass media filters; and residential pressure pumps and water filters, centrifugal filters, and drinking water purifiers. The company also provides aquaculture equipment, such as aquabiome mechanical and biological filters, aquaculture heating and pumps, bio-mec bead media, multicyclones, and spa airflo blowers. In addition, the company franchises retail outlets for swimming pool equipment and accessories. Further, it engages in formulating, packing, and distributing swimming pool chemicals to independent pool stores and stores in its Swimart franchise network. It operates 68 retail stores and 6 mobile franchises under the Swimart names; 10 WaterShoppe stores; and Zane Solar Systems, which consists of 38 dealer networks. Waterco Limited was incorporated in 1981 and is based in Rydalmere, Australia.

How the Company Makes Money

Waterco Limited generates revenue primarily through the sale of its water treatment products and systems, including swimming pool and spa equipment, and water filtration and purification systems. The company serves a diverse customer base, including homeowners, commercial property managers, and industrial clients. Waterco's earnings are bolstered by its extensive distribution network and partnerships with retailers and distributors globally. The company also invests in research and development to innovate and improve its product offerings, which helps maintain its competitive edge and customer loyalty, thereby contributing to its revenue streams.

Waterco Limited Financial Statement Overview

Summary

Waterco Limited exhibits robust financial health, characterized by significant revenue growth, strong profit margins, and efficient cash flow management. The company's balance sheet displays a solid capital structure with moderate leverage. While the cash flow statement shows positive trends, there remains potential for further optimization.

Income Statement

Waterco Limited has demonstrated strong revenue growth, with a substantial increase from $128.1M in 2023 to $244.8M in 2024, representing a growth rate of 91.1%. The gross profit margin stands at 49.1%, indicating efficient cost management. Net profit margin improved to 5.7% from 8.5% the previous year. The EBIT margin is 9.1%, showing robust operational efficiency. Overall, the income statement reflects a healthy financial performance with impressive growth and profitability.

Balance Sheet

The company maintains a solid financial position, with a debt-to-equity ratio of 0.62, indicating moderate leverage. The equity ratio is 50.3%, suggesting a strong equity base relative to total assets. Return on equity (ROE) is 10.7%, reflecting decent profitability for shareholders. The balance sheet demonstrates a stable financial structure with manageable debt levels and a strong equity position.

Cash Flow

Waterco Limited's free cash flow increased substantially from $8.3M in 2023 to $22.16M in 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.76, suggesting efficient conversion of income into cash. However, the free cash flow to net income ratio is 1.59, highlighting some room for improvement in cash management. Overall, the cash flow statement shows positive cash flow growth and efficient operations.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	244.84M	128.10M	122.81M	112.83M	93.28M
Gross Profit	120.31M	29.83M	28.93M	24.04M	16.09M
EBITDA	33.48M	21.63M	21.51M	15.98M	11.40M
Net Income	13.90M	10.85M	11.64M	12.76M	2.03M
Balance Sheet
Total Assets	257.77M	167.95M	157.65M	135.42M	146.21M
Cash, Cash Equivalents and Short-Term Investments	16.80M	12.34M	11.95M	11.69M	9.70M
Total Debt	80.69M	21.33M	20.89M	14.08M	35.94M
Total Liabilities	127.92M	46.72M	46.64M	34.97M	58.94M
Stockholders Equity	129.53M	120.87M	110.50M	99.87M	86.63M
Cash Flow
Free Cash Flow	22.16M	8.27M	-176.00K	2.44M	10.07M
Operating Cash Flow	24.50M	11.19M	3.33M	5.23M	11.99M
Investing Cash Flow	-56.21M	-3.39M	-3.92M	23.29M	-1.92M
Financing Cash Flow	37.58M	-7.12M	-1.23M	-24.07M	-4.06M

Waterco Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.90
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WAT, the sentiment is Neutral. The current price of 6.9 is below the 20-day moving average (MA) of 6.92, below the 50-day MA of 6.96, and above the 200-day MA of 6.89, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.60 is Neutral, neither overbought nor oversold. The STOCH value of 80.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:WAT.

Waterco Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAT	71 Outperform	AU$242.63M	18.97	9.71%	2.17%	44.28%	-0.27%
Sector *	60 Neutral	C$5.13B	-24.83	-19.26%	3.76%	12.02%	-69.08%
EMFGF	―	$41.05M	―	-481.21%	―	―	―
EGL	77 Outperform	AU$102.73M	27.00	9.28%	―	19.70%	8.70%
DEM	54 Neutral	AU$30.81M	―	-22.62%	―	6.37%	20.31%
RWL	48 Neutral	AU$46.94M	―	-10.18%	―	-6.95%	40.87%
PET	44 Neutral	AU$15.63M	6.25	-20.47%	―	-77.68%	-9.09%

Waterco Limited Corporate Events

Waterco Limited Announces Cessation of Securities

Waterco Limited announced the cessation of 60,000 securities, specifically options expiring on March 20, 2034, with an exercise price of $5.09. This cancellation was agreed upon between the entity and the holder, effective July 25, 2025, and reflects a strategic decision that may impact the company’s capital structure and investor relations.

Waterco Limited Announces Cessation of Securities

Waterco Limited has announced the cessation of 100,000 securities, specifically options expiring on August 23, 2031, priced at $3.15. This cancellation was agreed upon between the company and the securities holder, potentially impacting the company’s capital structure and signaling strategic financial adjustments.

Waterco Limited Addresses Historical ASX Listing Rule Breach

Waterco Limited has acknowledged a historical breach of ASX Listing Rule 10.1 due to lease arrangements with a related party, Mint Holdings Pty Ltd, which exceeded the permissible value threshold without prior security holder approval. To address this oversight, Waterco has proposed a remediation plan, including seeking security holder approval at its 2025 Annual General Meeting and commissioning an independent expert’s report. The company is committed to enhancing its internal compliance framework to prevent future breaches and is working closely with the ASX to resolve the issue.