Waterco Limited (WAT) AI Stock Analysis

• Market Cap: AU$175.82M
• Dividend Yield: 3%
• Average Volume (3M): 850.00
• Price to Earnings (P/E): 18.4
• Beta (1Y): 0.12
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: AU$5.00 ▼(-1.96% Downside)

Waterco Limited's overall stock score is primarily influenced by its stable financial performance and moderate valuation. However, the bearish technical indicators significantly impact the score, suggesting caution for potential investors. The absence of recent earnings call data and notable corporate events limits additional insights into the company's future prospects.

Positive Factors

Cash Flow Management

Strong free cash flow growth indicates robust financial health and effective cash management, allowing for reinvestment and debt reduction.

Balance Sheet Health

Improved debt-to-equity ratio suggests prudent financial management, enhancing stability and reducing risk from financial leverage.

Product Innovation

Ongoing investment in R&D for new products can drive future revenue growth and strengthen market position in the competitive water treatment industry.

Negative Factors

Revenue Growth Challenges

Negative revenue growth indicates potential market share loss or demand issues, impacting long-term financial performance and competitiveness.

Profitability Margins

Declining net profit margins suggest challenges in cost management or pricing power, affecting overall profitability and shareholder returns.

Operational Efficiency

Decreasing EBIT and EBITDA margins highlight pressure on operational efficiency, potentially limiting the company's ability to scale profitably.

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 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. The company should focus on enhancing operational efficiency and driving revenue growth to improve its financial performance further.

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: 5.10
• 50DMA: Positive
• 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 5.1 is above the 20-day moving average (MA) of 4.96, above the 50-day MA of 5.06, and below the 200-day MA of 6.15, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 60.78 is Neutral, neither overbought nor oversold. The STOCH value of 30.70 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%
WAT	58 Neutral	AU$175.82M	18.37	7.04%	3.00%	4.52%	-31.16%
EGL	54 Neutral	AU$89.42M	18.55	10.86%	―	13.51%	5.08%
DEM	53 Neutral	AU$32.32M	-13.57	-16.00%	―	11.53%	46.15%
FLC	48 Neutral	AU$114.18M	-4.48	―	―	11.44%	19.49%
RWL	47 Neutral	AU$44.55M	-5.36	-11.36%	―	18.27%	53.69%
PET	41 Neutral	AU$8.74M	-2.95	-26.47%	―	-45.80%	-210.00%

Waterco Limited Corporate Events

Waterco Limited Issues Unquoted Equity Securities as Part of Employee Incentive Scheme

Waterco Limited has announced the issuance of unquoted equity securities, specifically 20,000 options set to expire in December 2035, with an exercise price of $4.90. This move is part of an employee incentive scheme, which is not intended to be quoted on the ASX, reflecting the company’s strategy to motivate and retain talent while potentially impacting its future financial structure and market positioning.

Waterco Limited Issues New Employee Incentive Securities

Waterco Limited has announced the issuance of 300,000 unquoted equity securities in the form of options, which are set to expire on December 2, 2035, with an exercise price of $4.90. These securities are part of an employee incentive scheme, highlighting the company’s commitment to aligning employee interests with long-term corporate goals, potentially impacting its operational dynamics and market positioning positively.

Waterco Limited Announces Cessation of Securities

Waterco Limited announced the cessation of 185,000 securities due to the lapse of conditional rights, as the conditions were not met or became incapable of being satisfied. This announcement may impact the company’s capital structure and could influence investor perceptions regarding the company’s future financial strategies.

Waterco Limited Announces Cessation of Securities

Waterco Limited has announced the cessation of 90,000 securities, specifically options expiring on November 28, 2033, with an exercise price of $4.19. This cancellation was agreed upon between the entity and the holder, reflecting a strategic decision that may impact the company’s capital structure and investor relations.

Waterco Limited Announces Successful AGM Results

Waterco Limited announced the successful results of its 2025 Annual General Meeting, where all resolutions were carried by poll. This outcome reflects strong shareholder support and is expected to positively impact the company’s governance and operational strategies, reinforcing its industry position and stakeholder confidence.

Waterco Limited Reports Stable Performance Amid Global Challenges

At the 2025 Annual General Meeting, Waterco Limited’s Chairman highlighted the company’s stable performance despite a challenging global environment. The company is focusing on innovation, product development, and expanding distribution channels to enhance market share and revenue. The integration of Davey into the Waterco Group is expected to improve synergies, and new products and improved cost structures are anticipated to support earnings growth. Although specific profit guidance for FY26 has been deferred due to economic uncertainties, the company remains optimistic about its strategic direction and long-term value creation for stakeholders.

Waterco Limited Releases 2025 Corporate Governance Statement

Waterco Limited has released its corporate governance statement for the financial year ending June 30, 2025, which is available on their website. The statement outlines the company’s adherence to the ASX Corporate Governance Council’s principles, demonstrating its commitment to transparency and accountability. This release is significant as it reinforces Waterco’s dedication to maintaining robust governance practices, which is crucial for investor confidence and regulatory compliance.

Waterco Limited Embraces Sustainability in Annual Report

Waterco Limited has released its annual report, highlighting its commitment to environmental sustainability by using 100% recycled paper for its documentation. This initiative reflects the company’s efforts to reduce its carbon footprint and aligns with its broader strategy to adopt environmentally friendly technologies, potentially enhancing its reputation and appeal among eco-conscious stakeholders.