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Waterco Limited (AU:WAT)
ASX:WAT
Australian Market
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Waterco Limited (WAT) AI Stock Analysis

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AU:WAT

Waterco Limited

(Sydney:WAT)

Rating:71Outperform
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 (WAT) vs. iShares MSCI Australia ETF (EWA)

Waterco Limited Business Overview & Revenue Model

Company DescriptionWaterco 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 MoneyWaterco 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
87
Very Positive
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
81
Very Positive
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
75
Positive
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.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue244.84M128.10M122.81M112.83M93.28M
Gross Profit120.31M29.83M28.93M24.04M16.09M
EBITDA33.48M21.63M21.51M15.98M11.40M
Net Income13.90M10.85M11.64M12.76M2.03M
Balance Sheet
Total Assets257.77M167.95M157.65M135.42M146.21M
Cash, Cash Equivalents and Short-Term Investments16.80M12.34M11.95M11.69M9.70M
Total Debt80.69M21.33M20.89M14.08M35.94M
Total Liabilities127.92M46.72M46.64M34.97M58.94M
Stockholders Equity129.53M120.87M110.50M99.87M86.63M
Cash Flow
Free Cash Flow22.16M8.27M-176.00K2.44M10.07M
Operating Cash Flow24.50M11.19M3.33M5.23M11.99M
Investing Cash Flow-56.21M-3.39M-3.92M23.29M-1.92M
Financing Cash Flow37.58M-7.12M-1.23M-24.07M-4.06M

Waterco Limited Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price6.90
Price Trends
50DMA
6.96
Negative
100DMA
6.74
Positive
200DMA
6.89
Positive
Market Momentum
MACD
>-0.01
Positive
RSI
46.60
Neutral
STOCH
80.94
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

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
AU$242.63M18.979.71%2.17%44.28%-0.27%
60
Neutral
C$5.13B-24.83-19.26%3.76%12.02%-69.08%
$41.05M-481.21%
77
Outperform
AU$102.73M27.009.28%19.70%8.70%
54
Neutral
AU$30.81M-22.62%6.37%20.31%
48
Neutral
AU$46.94M-10.18%-6.95%40.87%
44
Neutral
AU$15.63M6.25-20.47%-77.68%-9.09%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:WAT
Waterco Limited
6.90
1.93
38.83%
EMFGF
Fluence Corporation Limited
0.04
0.02
100.00%
AU:PET
Phoslock Environmental Technologies Limited
0.02
0.00
0.00%
AU:EGL
Environmental Group Limited
0.27
-0.07
-20.59%
AU:RWL
Rubicon Water Limited
0.20
-0.12
-37.50%
AU:DEM
De.mem Ltd.
0.11
-0.03
-21.43%

Waterco Limited Corporate Events

Waterco Limited Announces Cessation of Securities
Jul 28, 2025

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
Jul 15, 2025

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
Jun 20, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 08, 2025