Watts Water Technologies (WTS) AI Stock Analysis

• Market Cap: $9.42B
• Dividend Yield: 0.7%
• Average Volume (3M): 136.97K
• Price to Earnings (P/E): 29.1
• Beta (1Y): 0.86
• Revenue Growth: 4.18%
• EPS Growth: 16.05%
• Country: US
• Employees: 4,800
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 2.50
• Shares Outstanding: 27,415,415
• 10 Day Avg. Volume: 155,283
• 30 Day Avg. Volume: 136,966
• PEG Ratio: 2.19
• Price to Book (P/B): 3.99
• Price to Sales (P/S): 3.02
• P/FCF Ratio: 20.90
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $290.50
• Price Target Upside: 6.33% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 9.81
• Revenue Forecast (FY): $2.34B

• Rating: 73 Outperform
• Price Target: $294.00 ▲(7.61% Upside)

Watts Water Technologies' strong financial performance and positive earnings call are the most significant factors driving the stock score. Despite technical analysis indicating potential short-term weakness and a high valuation, the company's robust financial health and strategic growth initiatives support a favorable outlook.

Positive Factors

Revenue Growth

Exceeding revenue expectations in Q3 highlights effective execution and strong market demand, supporting long-term growth prospects.

Acquisition Strategy

The acquisition of Haws Corporation expands product offerings and market reach, enhancing Watts' competitive position and growth potential.

Margin Expansion

Raising margin outlook indicates effective cost management and pricing strategies, contributing to sustainable profitability improvements.

Negative Factors

European Market Weakness

Weakness in the European market, especially in Germany, poses a risk to revenue stability and could impact overall growth.

Tariff Impact

Significant tariff impacts could strain cost structures and margins, challenging Watts' ability to maintain profitability.

Volume Deleverage Concerns

Potential volume declines, especially in Europe, may lead to margin pressures, affecting long-term financial performance.

Watts Water Technologies Business Overview & Revenue Model

Company Description

Watts Water Technologies (WTS) is a leading global provider of innovative water solutions, specializing in the design and manufacture of products for the water quality, flow control, and water conservation sectors. The company serves a diverse range of markets, including residential, commercial, and industrial applications, offering a comprehensive portfolio of valves, fittings, pipes, backflow prevention devices, and other water-related products. Watts aims to enhance the safety, efficiency, and sustainability of water systems worldwide.

How the Company Makes Money

Watts Water Technologies generates revenue primarily through the sale of its extensive range of plumbing, heating, and water quality products. The company operates on a business-to-business model, supplying products to wholesalers, distributors, and contractors in the construction and plumbing sectors. Key revenue streams include the sale of plumbing fittings and fixtures, hydronic heating products, and backflow prevention devices. Additionally, Watts benefits from partnerships with various distributors and manufacturers, which enhances its market reach and product availability. The company's focus on innovation and sustainability also allows it to capture emerging markets, particularly in water conservation technologies, contributing to its overall earnings.

Watts Water Technologies Financial Statement Overview

Summary

Watts Water Technologies demonstrates strong financial performance with consistent revenue growth and robust profit margins. The company maintains a solid balance sheet with low leverage and efficient cash flow management, positioning it well for future growth and stability.

Income Statement

Watts Water Technologies demonstrates strong financial performance with consistent revenue growth and robust profit margins. The TTM data shows a gross profit margin of 48.48% and a net profit margin of 13.63%, indicating efficient cost management and profitability. Revenue growth is steady at 2.98% in the TTM, showing resilience in the industrial machinery sector. EBIT and EBITDA margins are healthy, reflecting operational efficiency.

Balance Sheet

The company's balance sheet is solid with a low debt-to-equity ratio of 0.10, suggesting prudent financial leverage. Return on equity is strong at 17.64%, indicating effective use of equity capital to generate profits. The equity ratio stands at 71.80%, highlighting a stable financial structure with a significant portion of assets financed by equity.

Cash Flow

Watts Water Technologies shows a positive cash flow position with a free cash flow growth rate of 8.39% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.76, and the free cash flow to net income ratio is 0.89, reflecting efficient conversion of income into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.35B	2.25B	2.06B	1.98B	1.81B	1.51B
Gross Profit	1.15B	1.06B	960.90M	874.30M	767.10M	625.40M
EBITDA	472.00M	455.10M	401.00M	354.30M	285.50M	226.80M
Net Income	324.60M	291.20M	262.10M	251.50M	165.70M	114.30M
Balance Sheet
Total Assets	2.73B	2.40B	2.31B	1.93B	1.86B	1.74B
Cash, Cash Equivalents and Short-Term Investments	457.70M	386.90M	350.10M	310.80M	242.00M	218.90M
Total Debt	197.50M	197.00M	298.30M	147.60M	141.90M	198.20M
Total Liabilities	768.60M	689.10M	796.10M	630.30M	682.40M	668.40M
Stockholders Equity	1.96B	1.71B	1.51B	1.30B	1.17B	1.07B
Cash Flow
Free Cash Flow	343.50M	325.80M	281.10M	195.90M	154.10M	185.00M
Operating Cash Flow	386.80M	361.10M	310.80M	224.00M	180.80M	228.80M
Investing Cash Flow	-129.00M	-124.70M	-343.10M	-22.90M	-30.70M	-54.80M
Financing Cash Flow	-108.80M	-190.50M	69.00M	-121.70M	-118.60M	-181.90M

Watts Water Technologies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 273.21
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTS, the sentiment is Neutral. The current price of 273.21 is below the 20-day moving average (MA) of 275.67, below the 50-day MA of 277.71, and above the 200-day MA of 242.26, indicating a neutral trend. The MACD of -1.35 indicates Positive momentum. The RSI at 47.84 is Neutral, neither overbought nor oversold. The STOCH value of 53.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WTS.

Watts Water Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLS	79 Outperform	$8.84B	20.24	20.97%	1.21%	3.19%	69.89%
THR	76 Outperform	$937.72M	17.96	11.74%	―	3.08%	35.81%
MWA	75 Outperform	$4.07B	27.52	21.40%	1.03%	8.75%	64.82%
SPXC	75 Outperform	$11.12B	46.43	12.76%	―	12.60%	24.02%
WTS	73 Outperform	$9.42B	29.13	17.81%	0.70%	4.18%	16.05%
AOS	70 Outperform	$9.13B	17.71	28.21%	2.08%	-1.64%	-2.50%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Watts Water Technologies Corporate Events

Watts Water Reports Strong Q3 2025 Results

Watts Water Technologies, Inc. is a global leader in the manufacturing of plumbing, heating, and water quality products, serving residential, commercial, and institutional applications. The company has reported strong financial results for the third quarter of 2025, with sales reaching $612 million, marking a 13% increase from the previous year. The company’s performance was bolstered by robust execution in the Americas, which offset market weaknesses in Europe. Key financial metrics include an operating margin of 18.2% and a diluted EPS of $2.45, both showing significant improvements over the prior year. Additionally, Watts Water has announced the acquisition of Haws Corporation, expanding its product offerings in emergency safety and hydration solutions. Looking ahead, Watts Water is optimistic about its growth prospects, with plans to increase sales and margins for the full year 2025, supported by a strong balance sheet and strategic investments.

Watts Water Reports Record Earnings Amid Global Challenges

The recent earnings call for Watts Water Technologies reflected a strong financial performance, marked by record sales and earnings. The company attributed this success to favorable pricing strategies and successful acquisitions. Despite these achievements, challenges were noted in the European market and from tariff impacts. The sentiment during the call was cautiously optimistic, with an increased full-year outlook tempered by uncertainties in global markets.

Watts Water Technologies Reports Record Q2 2025 Results

Watts Water Technologies, Inc. is a global leader in the manufacturing of innovative plumbing, heating, and water quality products, serving residential, commercial, and institutional applications. The company is renowned for its comprehensive solutions in the water industry.