Waterco Limited (WAT) AI Stock Analysis

• Market Cap: AU$184.61M
• Dividend Yield: 2.78%
• Average Volume (3M): 850.00
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.09
• Revenue Growth: 4.52%
• EPS Growth: -31.16%
• Country: AU
• Employees: 989
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.10
• Shares Outstanding: 35,163,937
• 10 Day Avg. Volume: 1,695
• 30 Day Avg. Volume: 850
• PEG Ratio: -0.79
• Price to Book (P/B): 1.73
• Price to Sales (P/S): 0.97
• P/FCF Ratio: 13.60
• 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: Hold
• Number of Analyst Covering: 0

• Rating: 57 Neutral
• Price Target: AU$6.00 ▲(11.11% Upside)

Waterco Limited's overall stock score is primarily influenced by its stable financial performance, particularly strong cash flow management. However, the bearish technical indicators and moderate valuation metrics suggest caution. The lack of earnings call data and corporate events limits further insights into the company's future prospects.

Waterco Limited Business Overview & Revenue Model

Company Description

Waterco Limited (WAT) is an Australian-based company specializing in the design, manufacture, and distribution of water treatment and pool equipment. The company operates primarily within the sectors of water management, swimming pool maintenance, and environmental solutions. Waterco's core products include filtration systems, pumps, and chemical dosing equipment, catering to residential, commercial, and industrial applications. With a focus on innovation and sustainability, Waterco aims to provide high-quality solutions that enhance water quality and efficiency.

How the Company Makes Money

Waterco Limited generates revenue through several key streams. The primary source of income comes from the sale of its products, including water filtration systems, pumps, and pool equipment, which are distributed through a network of retailers and distributors both in Australia and internationally. Additionally, the company earns revenue from service contracts and maintenance agreements for its installed systems, which ensure ongoing support and operation for clients. Waterco also benefits from partnerships with various suppliers and distributors that expand its market reach and enhance its product offerings. Moreover, the company invests in research and development to innovate new products, which can lead to increased sales and market share in the competitive water treatment industry.

Waterco Limited Financial Statement Overview

Summary

Waterco Limited presents a stable financial outlook with strengths in cash flow management and a solid balance sheet. However, challenges in revenue growth and profitability margins indicate areas for improvement.

Income Statement

Waterco Limited's income statement shows a mixed performance. The gross profit margin has remained relatively stable over the years, indicating consistent cost management. However, the net profit margin has decreased in the latest year, reflecting challenges in converting revenue into profit. Revenue growth has been negative recently, which is a concern, although past years showed positive growth. The EBIT and EBITDA margins have also declined, suggesting pressure on operational efficiency.

Balance Sheet

The balance sheet of Waterco Limited reflects a moderate financial position. The debt-to-equity ratio has improved slightly, indicating better leverage management. Return on equity has decreased, showing reduced profitability for shareholders. The equity ratio remains healthy, suggesting a stable capital structure. Overall, the balance sheet indicates a cautious approach to debt and a solid equity base.

Cash Flow

Waterco Limited's cash flow statement highlights strong free cash flow growth, which is a positive indicator of financial health. The operating cash flow to net income ratio is stable, showing consistent cash generation relative to net income. The free cash flow to net income ratio is high, suggesting effective cash management. Overall, the cash flow position is robust, with significant improvements in free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	194.84M	254.93M	244.84M	128.10M	122.81M	112.83M
Gross Profit	95.57M	125.54M	120.31M	29.83M	28.93M	24.04M
EBITDA	24.25M	31.84M	33.48M	21.63M	21.51M	15.98M
Net Income	7.72M	9.57M	13.90M	10.85M	11.64M	12.76M
Balance Sheet
Total Assets	264.24M	264.24M	257.77M	167.95M	157.65M	135.42M
Cash, Cash Equivalents and Short-Term Investments	24.52M	24.52M	16.80M	12.34M	11.95M	11.69M
Total Debt	82.35M	82.35M	80.69M	21.33M	20.89M	14.08M
Total Liabilities	121.60M	121.60M	127.92M	46.72M	46.64M	34.97M
Stockholders Equity	142.27M	142.27M	129.53M	120.87M	110.50M	99.87M
Cash Flow
Free Cash Flow	8.47M	18.11M	22.16M	8.27M	-176.00K	2.44M
Operating Cash Flow	11.24M	21.15M	24.50M	11.19M	3.33M	5.23M
Investing Cash Flow	-2.82M	-2.83M	-56.21M	-3.39M	-3.92M	23.29M
Financing Cash Flow	-11.57M	-11.57M	37.58M	-7.12M	-1.23M	-24.07M

Waterco Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 5.4 is below the 20-day moving average (MA) of 5.44, below the 50-day MA of 6.07, and below the 200-day MA of 6.76, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 49.24 is Neutral, neither overbought nor oversold. The STOCH value of 46.85 is Neutral, 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
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
EGL	60 Neutral	AU$91.32M	19.35	10.86%	―	13.51%	5.08%
WAT	57 Neutral	AU$184.61M	19.29	7.04%	2.78%	4.52%	-31.16%
DEM	49 Neutral	AU$30.81M	―	-16.00%	―	11.53%	46.15%
FLC	48 Neutral	AU$88.12M	―	―	―	11.44%	19.49%
PET	44 Neutral	AU$5.00M	―	-26.47%	―	-45.80%	-210.00%
RWL	41 Neutral	AU$32.49M	―	-11.36%	―	18.27%	53.69%

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.