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Waterco Limited (AU:WAT)
ASX:WAT
Australian Market

Waterco Limited (WAT) AI Stock Analysis

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AU

Waterco Limited

(Sydney:WAT)

Rating:74Outperform
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 (WAT) vs. iShares MSCI Australia ETF (EWA)

Waterco Limited Business Overview & Revenue Model

Company DescriptionWaterco 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 MoneyWaterco 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
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.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue260.78M244.84M128.10M122.81M112.83M93.28M
Gross Profit127.25M120.31M29.83M28.93M24.04M16.09M
EBITDA25.55M33.48M21.63M21.51M15.98M11.40M
Net Income12.74M13.90M10.85M11.64M12.76M2.03M
Balance Sheet
Total Assets274.51M257.77M167.95M157.65M135.42M146.21M
Cash, Cash Equivalents and Short-Term Investments16.05M16.80M12.34M11.95M11.69M9.70M
Total Debt82.19M80.69M21.33M20.89M14.08M35.94M
Total Liabilities135.29M127.92M46.72M46.64M34.97M58.94M
Stockholders Equity138.84M129.53M120.87M110.50M99.87M86.63M
Cash Flow
Free Cash Flow6.49M22.16M8.27M-176.00K2.44M10.07M
Operating Cash Flow10.29M24.50M11.19M3.33M5.23M11.99M
Investing Cash Flow-2.86M-56.21M-3.39M-3.92M23.29M-1.92M
Financing Cash Flow-16.30M37.58M-7.12M-1.23M-24.07M-4.06M

Waterco Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.00
Price Trends
50DMA
6.79
Positive
100DMA
6.84
Positive
200DMA
6.75
Positive
Market Momentum
MACD
0.04
Positive
RSI
59.77
Neutral
STOCH
100.00
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

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUWAT
74
Outperform
AU$246.16M19.249.71%2.00%44.28%-0.27%
AUEGL
69
Neutral
AU$98.93M26.009.28%19.70%8.70%
58
Neutral
AU$898.91M4.43-2.39%4.88%22.98%-116.74%
AUDEM
54
Neutral
AU$30.77M-22.62%6.37%20.31%
AUPET
44
Neutral
AU$15.63M6.25-20.47%-77.68%-9.09%
AURWL
44
Neutral
AU$38.51M-10.18%-6.95%40.87%
AUFLC
30
Underperform
$42.87M-481.21%-27.44%5.05%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:WAT
Waterco Limited
7.00
2.13
43.74%
AU:EGL
Environmental Group Limited
0.26
-0.08
-23.53%
AU:PET
Phoslock Environmental Technologies Limited
0.02
0.00
0.00%
AU:FLC
Fluence Corporation Limited
0.04
-0.07
-64.55%
AU:RWL
Rubicon Water Limited
0.16
-0.17
-51.52%
AU:DEM
De.mem Ltd.
0.10
-0.02
-16.67%

Waterco Limited Corporate Events

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 01, 2025