Waterco Limited (WAT) AI Stock Analysis

• Market Cap: AU$246.16M
• Dividend Yield: 2%
• Average Volume (3M): 542.00
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.15
• Revenue Growth: 44.28%
• EPS Growth: -0.27%
• Country: AU
• Employees: 989
• Sector: Utilities
• Sector Strength: 67
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.36
• Shares Outstanding: 35,165,943
• 10 Day Avg. Volume: 354
• 30 Day Avg. Volume: 542
• PEG Ratio: -2.15
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.06
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: AU$8.00 ▲(14.29%Upside)

Waterco Limited demonstrates strong financial performance with significant revenue growth and solid profit margins, which are the most impactful factors supporting the stock score. The technical analysis suggests positive momentum, though caution is advised due to potential overbought conditions. Valuation metrics indicate that the stock is fairly priced with a moderate dividend yield.

Waterco Limited Business Overview & Revenue Model

Company Description

Waterco Limited (WAT) is a company that specializes in the manufacturing and distribution of equipment and solutions for water treatment and swimming pool maintenance. Catering to both residential and commercial markets, Waterco offers a range of products including swimming pool pumps, sand filters, heaters, and water treatment systems. The company is known for its commitment to quality and innovation, providing sustainable and energy-efficient solutions to its customers.

How the Company Makes Money

Waterco Limited primarily generates revenue through the sale of its water treatment and swimming pool equipment. The company's key revenue streams include direct sales to consumers, distribution partnerships with retailers, and contracts with commercial entities such as hotels and public swimming facilities. Additionally, Waterco benefits from a network of international distributors, which helps expand its market reach. The company also invests in research and development to continuously improve its products, thereby maintaining a competitive edge in the industry.

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	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	260.78M	244.84M	128.10M	122.81M	112.83M	93.28M
Gross Profit	127.25M	120.31M	29.83M	28.93M	24.04M	16.09M
EBITDA	25.55M	33.48M	21.63M	21.51M	15.98M	11.40M
Net Income	12.74M	13.90M	10.85M	11.64M	12.76M	2.03M
Balance Sheet
Total Assets	274.51M	257.77M	167.95M	157.65M	135.42M	146.21M
Cash, Cash Equivalents and Short-Term Investments	16.05M	16.80M	12.34M	11.95M	11.69M	9.70M
Total Debt	82.19M	80.69M	21.33M	20.89M	14.08M	35.94M
Total Liabilities	135.29M	127.92M	46.72M	46.64M	34.97M	58.94M
Stockholders Equity	138.84M	129.53M	120.87M	110.50M	99.87M	86.63M
Cash Flow
Free Cash Flow	6.49M	22.16M	8.27M	-176.00K	2.44M	10.07M
Operating Cash Flow	10.29M	24.50M	11.19M	3.33M	5.23M	11.99M
Investing Cash Flow	-2.86M	-56.21M	-3.39M	-3.92M	23.29M	-1.92M
Financing Cash Flow	-16.30M	37.58M	-7.12M	-1.23M	-24.07M	-4.06M

Waterco Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.00
• 50DMA: Positive
• 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 Positive. The current price of 7 is above the 20-day moving average (MA) of 6.97, above the 50-day MA of 6.79, and above the 200-day MA of 6.75, indicating a bullish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 59.77 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:WAT.

Waterco Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAT	74 Outperform	AU$246.16M	19.24	9.71%	2.00%	44.28%	-0.27%
EGL	69 Neutral	AU$98.93M	26.00	9.28%	―	19.70%	8.70%
Sector *	58 Neutral	AU$898.91M	4.43	-2.39%	4.88%	22.98%	-116.74%
DEM	54 Neutral	AU$30.77M	―	-22.62%	―	6.37%	20.31%
PET	44 Neutral	AU$15.63M	6.25	-20.47%	―	-77.68%	-9.09%
RWL	44 Neutral	AU$38.51M	―	-10.18%	―	-6.95%	40.87%
FLC	30 Underperform	$42.87M	―	-481.21%	―	-27.44%	5.05%

Waterco Limited Corporate Events

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.