Watts Water Technologies (WTS) AI Stock Analysis

• Market Cap: $9.10B
• Dividend Yield: 0.66%
• Average Volume (3M): 224.76K
• Price to Earnings (P/E): 29.3
• Beta (1Y): 0.96
• Revenue Growth: 2.96%
• EPS Growth: 12.62%
• Country: US
• Employees: 4,800
• Sector: Industrials
• Sector Strength: 84
• Industry: Industrial - Machinery
• EPS (TTM): 3.09
• Shares Outstanding: 27,422,200
• 10 Day Avg. Volume: 336,777
• 30 Day Avg. Volume: 224,761
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 7.28
• Enterprise Value/Ebitda: 18.24
• 1Y Price Target: $282.40
• Price Target Upside: 1.85% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: $311.00 ▲(12.17% Upside)

Watts Water Technologies exhibits strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. Technical analysis indicates potential for a short-term pullback due to overbought conditions, and valuation metrics suggest the stock is relatively expensive. Despite these concerns, the company's robust financial health and optimistic outlook support a solid overall score.

Positive Factors

Market Share

Watts' domestic manufacturing footprint allowed them to gain market share and drive margins due to better product availability.

Trade Policy

Watts could be a net beneficiary of U.S. trade policy with more domestic production than competitors who source more heavily from China.

Negative Factors

End Market Demand

Tariffs are expected to lead to fundamentally lower demand in Watts' end markets.

Trade Uncertainty

Uncertainty around global trading rules and trade freezes between the U.S. and China are expected to persist, posing challenges for investments.

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 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, high profit margins, and effective cash flow management. However, recent revenue growth deceleration and decreased liquidity flexibility pose potential challenges.

Income Statement

Watts Water Technologies has shown strong and consistent revenue growth over several years, with a TTM gross profit margin of 47.65% and net profit margin of 13.06%. The company maintains healthy EBIT and EBITDA margins, indicating effective cost management and operational efficiency. However, recent revenue growth has slowed, suggesting potential challenges in maintaining past growth rates.

Balance Sheet

The balance sheet reflects a robust equity position with an equity ratio of 70.89%, underscoring financial stability. The debt-to-equity ratio is low at 0.11, indicating conservative leverage, and the ROE stands at 16.51%, reflecting efficient use of equity to generate profits. However, the decrease in cash and short-term investments could limit liquidity flexibility.

Cash Flow

Cash flow analysis shows strong free cash flow growth with a TTM free cash flow to net income ratio of 1.15, indicating good cash conversion. The operating cash flow to net income ratio of 1.27 further highlights the company's strong cash-generating capability. However, the capital expenditure remains consistent, which could limit future cash flow flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.29B	2.25B	2.06B	1.98B	1.81B	1.51B
Gross Profit	1.11B	1.06B	960.90M	874.30M	767.10M	625.40M
EBITDA	442.30M	455.10M	401.00M	354.30M	285.50M	226.80M
Net Income	311.50M	291.20M	262.10M	251.50M	165.70M	114.30M
Balance Sheet
Total Assets	2.64B	2.40B	2.31B	1.93B	1.86B	1.74B
Cash, Cash Equivalents and Short-Term Investments	369.30M	386.90M	350.10M	310.80M	242.00M	218.90M
Total Debt	197.30M	197.00M	298.30M	147.60M	141.90M	198.20M
Total Liabilities	752.50M	689.10M	796.10M	630.30M	682.40M	668.40M
Stockholders Equity	1.89B	1.71B	1.51B	1.30B	1.17B	1.07B
Cash Flow
Free Cash Flow	316.90M	325.80M	281.10M	195.90M	154.10M	185.00M
Operating Cash Flow	355.10M	361.10M	310.80M	224.00M	180.80M	228.80M
Investing Cash Flow	-122.70M	-124.70M	-343.10M	-22.90M	-30.70M	-54.80M
Financing Cash Flow	-153.90M	-190.50M	69.00M	-121.70M	-118.60M	-181.90M

Watts Water Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 277.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 277.27 is above the 20-day moving average (MA) of 258.66, above the 50-day MA of 251.44, and above the 200-day MA of 220.88, indicating a bullish trend. The MACD of 5.84 indicates Negative momentum. The RSI at 76.12 is Negative, neither overbought nor oversold. The STOCH value of 92.50 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
SPXC	78 Outperform	$8.94B	42.88	15.02%	―	8.90%	29.18%
FLS	77 Outperform	$6.95B	24.11	13.91%	1.56%	3.15%	14.18%
AOS	76 Outperform	$10.00B	19.89	27.60%	1.85%	-3.53%	-7.46%
MWA	75 Outperform	$4.21B	28.43	17.33%	0.98%	10.19%	20.71%
WTS	74 Outperform	$9.10B	29.33	17.75%	0.66%	2.96%	12.62%
THR	67 Neutral	$850.10M	16.46	10.88%	―	-2.16%	9.41%
Sector *	59 Neutral	AU$1.63B	11.15	-5.90%	3.59%	9.81%	6.78%

Watts Water Technologies Corporate Events

Watts Water Technologies Appoints New CFO Ryan Lada

On July 14, 2025, Watts Water Technologies, Inc. announced the appointment of Ryan Lada as the new Chief Financial Officer, effective July 28, 2025. This appointment follows the planned retirement of Shashank Patel, the current CFO, who will assist with the transition. Mr. Lada brings a wealth of experience from his previous roles at companies like The AZEK Company and Cantel Medical Corporation. His compensation package includes a base salary of $525,000, participation in various incentive and benefit plans, and additional allowances.

The most recent analyst rating on (WTS) stock is a Hold with a $217.00 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 New Board of Directors

On May 21, 2025, Watts Water Technologies, Inc. held its annual meeting where key decisions were made regarding the company’s leadership and financial oversight. The meeting resulted in the election of nine directors for the upcoming term, approval of executive compensation, and ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions reflect strong shareholder support, with significant majorities voting in favor of each proposal, indicating confidence in the company’s strategic direction and governance.

The most recent analyst rating on (WTS) stock is a Hold with a $217.00 price target. To see the full list of analyst forecasts on Watts Water Technologies stock, see the WTS Stock Forecast page.