Watsco is an HVAC distribution business with a strong Piotroski score of 7/9 and solid free cash flow quality, but three consecutive earnings misses, analyst estimates trending down 16% over 30 days, and a dividend payout ratio of 343% create a fragile income and earnings outlook.
Thesis pillars
- Earnings Miss Streak↑Improving
- Dividend Payout Sustainability↑Improving
- Operational Quality Resilience→Stable
- +1 more pillar — see the Why tab for full reasoning
Watsco, Inc. (WSO) Stock Analysis
Falling Knife setup
Industrials · Industrial Distribution
Sell if holding. Momentum 4.2/10 is below the 5.0 floor at $295.09 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Thin upside margin: 9.1%; Sector modifier (Industrials): -0.7.
Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies ("HVAC/R") in the HVAC/R... Read more
Sell if holding. Momentum 4.2/10 is below the 5.0 floor at $295.09 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Thin upside margin: 9.1%; Sector modifier (Industrials): -0.7. Chart setup: Death cross, below all MAs, RSI 29, MACD bearish. Score 4.6/10, high confidence.
Passes 5/8 gates (favorable risk/reward ratio, clean insider activity, no SEC red flags, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and death cross (50MA < 200MA). Suitability: moderate.
Recent developments
updated 2026-10-15Recent Developments — Watsco, Inc.
Latest news
- NEWS Why Watsco (WSO) Shares Are Trading Lower Today - StockStory — StockStory negative
- NEWS Why Watsco (WSO) Shares Are Trading Lower Today - TradingView — TradingView negative
- NEWS Why Watsco (WSO) Shares Are Trading Lower Today - tradingview.com — tradingview.com negative
- NEWS Why Watsco (WSO) Shares Are Trading Lower Today - FinancialContent — FinancialContent negative
- NEWS Watsco falls to 3-yr low on margin pressure, revenue miss (WSO:NYSE) - Seeking Alpha — Seeking Alpha negative
Generated 2026-10-15T11:52:21Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
2 floor-breakers
Growth below the gate floor. Component breakdown shows what dragged the score down.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Momentum 4.2/10 is below the 5.0 floor at $295.09 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Thin upside margin: 9.1%; Sector modifier (Industrials): -0.7. Chart setup: Death cross, below all MAs, RSI 29, MACD bearish. Prior stop was $277.45. Score 4.6/10, high confidence.
Take-profit target: $321.81 (+9.1% upside). Prior stop was $277.45. Stop-loss: $277.45.
Thin upside margin: 9.1%; Sector modifier (Industrials): -0.7; Consecutive earnings misses (3).
Watsco, Inc. trades at a P/E of 25.0 (forward 22.0). TrendMatrix value score: 5.8/10. Verdict: Sell.
23 analysts cover WSO with a consensus score of 2.8/5. Average price target: $370.
What does Watsco, Inc. do?Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in...
Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies ("HVAC/R") in the HVAC/R distribution industry in North America. At December 31, 2025, we operated from 695 locations in 43 U.S.