Watts Water Technologies (WTS) AI Stock Analysis

• Market Cap: $10.24B
• Dividend Yield: 0.7%
• Average Volume (3M): 144.13K
• Price to Earnings (P/E): 31.7
• Beta (1Y): 0.80
• 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: 27,406,631
• 10 Day Avg. Volume: 169,674
• 30 Day Avg. Volume: 144,128
• 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: 0.98
• Enterprise Value/Revenue: 4.27
• Enterprise Value/Gross Profit: 8.73
• Enterprise Value/Ebitda: 20.03
• 1Y Price Target: $325.00
• Price Target Upside: 5.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $344.00 ▲(11.40% Upside)

Watts Water Technologies' strong financial performance and positive earnings call are significant strengths, contributing to a robust overall score. However, the stock's premium valuation and neutral technical indicators suggest caution. The company's ability to navigate external challenges and optimize cash flow will be key to sustaining its performance.

Positive Factors

Balance Sheet Strength

Very low leverage and a high equity base give Watts structural financial flexibility. This supports sustained investment in product development and acquisitions, cushions downturns, and preserves access to capital for long-term growth initiatives and opportunistic M&A.

Sustainable Profitability

High gross and net margins indicate durable pricing power and efficient manufacturing/distribution. In the plumbing/HVAC markets, margin resilience supports reinvestment in R&D and service capabilities, enabling long-term competitiveness even amid cost pressures.

Growth via Acquisitions & Organic Demand

Combination of strong organic demand and targeted acquisitions expands product breadth and addressable markets. Strategic deals like Haws add complementary capabilities, improving cross-sell, scale, and potential margin expansion over multiple reporting periods.

Negative Factors

Regional Demand Headwinds (Europe)

Sustained weakness in Europe poses a structural growth headwind given the region's contribution to global sales. Prolonged soft demand can compress regional margins, require localized cost actions, and limit the firm's ability to hit consolidated growth targets.

Tariff and Supply-Chain Pressure

Material tariff exposure is a persistent structural margin risk. Ongoing duties and supply-chain complexity can erode pricing benefits and productivity gains, forcing higher customer prices or margin concessions and complicating long-term sourcing and cost planning.

Cash Conversion Below Net Income

Cash conversion rates below 1.0 mean earnings are not fully translating to free cash. Over time this can constrain organic reinvestment, dividends, and acquisition funding unless conversion improves, making capital allocation and balance-sheet resilience more dependent on performance execution.

Watts Water Technologies Business Overview & Revenue Model

Company Description

Watts Water Technologies, Inc. designs, manufactures, and sells products, solution, and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial and residential markets in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. The company offers residential and commercial flow control products, including backflow preventers, water pressure regulators, temperature and pressure relief valves, and thermostatic mixing valves. It also provides heating, ventilation, and air conditioning and gas products, such as boilers, water heaters, custom heat, and hot water solutions; hydronic and electric heating systems for under-floor radiant applications; custom heat and hot water solutions; hydronic pump groups for boiler manufacturers and alternative energy control packages; and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications. In addition, the company offers drainage and water re-use products comprising drainage products and engineered rain water harvesting solutions for commercial, industrial, marine, and residential applications; and water quality products that include point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems for commercial and residential applications. Further, it provides smart mixing system under the IntelliStation name. The company sells its products to plumbing, heating, and mechanical wholesale distributors and dealers, as well as original equipment manufacturers, specialty product distributors, do-it-yourself chains, and retail chains; and directly to wholesalers and private label accounts. Watts Water Technologies, Inc. was founded in 1874 and is headquartered in North Andover, Massachusetts.

How the Company Makes Money

Watts Water Technologies generates revenue through the sale of its diverse range of products, which are primarily sold to plumbing and HVAC wholesalers, contractors, and distributors. The company benefits from multiple revenue streams, including direct sales, e-commerce, and partnerships with leading industry players. Key revenue drivers include the increasing demand for water efficiency and safety products, as well as the growing emphasis on sustainable building practices. Additionally, the company often engages in strategic acquisitions to expand its product portfolio and market reach, further contributing to its earnings.

Watts Water Technologies Financial Statement Overview

Summary

Watts Water Technologies demonstrates strong financial health with consistent revenue and profit growth, low leverage, and effective cash flow management. The company's solid balance sheet and efficient operations position it well in the Industrial - Machinery sector. Continued focus on cash flow optimization could further enhance financial performance.

Income Statement

Watts Water Technologies shows strong financial performance with a consistent increase in revenue and profit margins. The TTM data indicates a Gross Profit Margin of 48.84% and a Net Profit Margin of 13.79%, both of which are healthy for the industry. Revenue growth has been steady, with a 2.98% increase in the TTM period. The EBIT and EBITDA margins are also robust, reflecting efficient operations.

Balance Sheet

The company's balance sheet is solid, with a low Debt-to-Equity Ratio of 0.10, indicating low leverage and financial stability. The Return on Equity (ROE) is strong at 17.72%, showing effective use of equity to generate profits. The Equity Ratio stands at 71.81%, suggesting a strong equity base relative to total assets.

Cash Flow

Cash flow metrics are positive, with a Free Cash Flow Growth Rate of 8.39% in the TTM period, indicating healthy cash generation. The Operating Cash Flow to Net Income Ratio is 0.83, and the Free Cash Flow to Net Income Ratio is 0.89, both reflecting good cash conversion from profits. However, there is room for improvement in cash flow efficiency.

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	501.30M	455.10M	401.00M	354.30M	285.50M	226.80M
Net Income	324.70M	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: Positive
• Last Price: 308.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTS, the sentiment is Positive. The current price of 308.8 is above the 20-day moving average (MA) of 297.07, above the 50-day MA of 285.55, and above the 200-day MA of 264.91, indicating a bullish trend. The MACD of 5.96 indicates Negative momentum. The RSI at 67.59 is Neutral, neither overbought nor oversold. The STOCH value of 82.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$10.14B	23.20	20.97%	1.17%	3.19%	69.89%
MWA	79 Outperform	$4.30B	21.78	21.55%	1.09%	8.75%	64.82%
WTS	77 Outperform	$10.24B	31.67	17.81%	0.70%	4.18%	16.05%
AOS	77 Outperform	$10.91B	20.36	29.20%	2.04%	-1.64%	-2.50%
SPXC	77 Outperform	$10.60B	46.51	12.76%	―	12.60%	24.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	59 Neutral	$10.40B	32.81	12.38%	―	5.52%	9.03%

Watts Water Technologies Corporate Events

Watts Water Technologies Appoints New CFO

On November 14, 2025, Ryan Lada, the Chief Financial Officer of Watts Water Technologies, resigned to pursue another opportunity, and was subsequently removed from his position by the Board of Directors on November 15, 2025. Diane McClintock, who has been with the company since 2010, was appointed as the new Chief Financial Officer. McClintock’s extensive experience and familiarity with the company’s operations are expected to provide financial and strategic continuity, supporting Watts’ growth and shareholder value.

The most recent analyst rating on (WTS) stock is a Hold with a $300.00 price target. To see the full list of analyst forecasts on Watts Water Technologies stock, see the WTS Stock Forecast page.

Watts Water Technologies Elects Suzanne Stefany to Board

On November 9, 2025, Watts Water Technologies elected Suzanne L. Stefany to its Board of Directors, where she will serve until the 2026 Annual Meeting of Stockholders. Ms. Stefany, who has a background with PJT Partners and Wellington Management Company, will also join the Governance and Sustainability Committee and the Compensation Committee. She will receive a grant of 351 shares of class A common stock and a pro-rated cash retainer as part of her compensation.

The most recent analyst rating on (WTS) stock is a Hold with a $300.00 price target. To see the full list of analyst forecasts on Watts Water Technologies stock, see the WTS Stock Forecast page.