Watts Water Technologies is a high-quality industrial machinery manufacturer with a perfect four-quarter earnings beat streak averaging 13.3% above estimates, 21% year-over-year earnings growth, a wide economic moat, and an 8/9 Piotroski score — but trades at a forward price-to-earnings of 25.6x with free cash flow quality at only 50% of net income, limiting the near-term return profile.
Thesis pillars
- Wide Moat Compounder Quality→Stable
- Perfect Earnings Beat Streak→Stable
- Strong Growth Leadership→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 23, 2026· older than 90 days
Watts Water Technologies, Inc. (WTS) Stock Analysis
Range Bound setup
Industrials · Specialty Industrial Machinery
Hold if already holding. Not a fresh buy at $353.30, but acceptable to hold if already in. Reasons: Concentration risk — Product: residential and commercial flow control products (61.0%); Concentration risk — Supplier: single-sourced international components.
Watts Water Technologies manufactures and sells water control, flow control, and water quality products across three geographic segments: Americas, Europe, and APMEA. Revenue comes from wholesale distributors (66% of net sales in 2025), OEMs, specialty channels, and DIY chains,... Read more
Hold if already holding. Not a fresh buy at $353.30, but acceptable to hold if already in. Reasons: Concentration risk — Product: residential and commercial flow control products (61.0%); Concentration risk — Supplier: single-sourced international components. Chart setup: RSI 49 mid-range, Bollinger mid-band. Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Score 5.9/10, moderate confidence.
Passes 7/9 gates (positive momentum, clean insider activity, no SEC red flags, news boost earnings 0.70, earnings proximity no date, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
About Watts Water Technologies, Inc.
About Watts Water Technologies, Inc.
Watts Water Technologies' residential and commercial flow control and protection segment generated 61% of 2025 net sales, with HVAC and gas solutions contributing 23%, drainage and water re-use 11%, and water quality 5%. Top-10 customers accounted for $570.3 million, or 23.4% of total net sales, across commercial and residential building markets in three geographic segments—Americas, Europe, and APMEA—served by approximately 5,700 employees globally, including 3,100 in the Americas, 1,900 in Europe, and 700 in APMEA.
Watts Water earns revenue primarily through wholesale distributors, which accounted for 66% of net sales in 2025, followed by specialty channels at 21%, OEMs at 10%, and DIY chains at 3%. No single customer exceeded 10% of total net sales. Products are manufactured using bronze, brass, cast iron, stainless steel, and plastic sourced substantially from external suppliers; certain components and finished goods are internationally sourced, including some that are single-sourced. Tariffs imposed in 2025 on imports from Canada, China, and Mexico increased product costs and may weigh on gross margins; commodity prices for copper and stainless steel have experienced substantial volatility in recent years. The company has completed 17 acquisitions since 2016 to extend its addressable market, and in 2025 expanded its Nexa intelligent water management platform through new hardware integrations.
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Watts Water sources certain components and finished goods internationally, including some that are single-sourced, creating supply exposure if disruption affects key suppliers in Asia. The company notes it cannot predict whether commodity costs—particularly copper and stainless steel—will significantly increase or decrease; if costs rise and cannot be offset through price increases, profit margins could decrease. A February 2026 U.S. Supreme Court decision invalidating tariffs imposed under the International Emergency Economic Powers Act introduced further uncertainty about trade policy direction and could affect cost structure and supply chain planning.
See also: Industrials · Specialty Industrial Machinery
From Watts Water Technologies, Inc.'s most recent 10-K filing, extracted June 16, 2026.
Recent developments
updated Oct 28, 2026Recent Developments — Watts Water Technologies, Inc.
Latest news
- NEWS Watts Water Technologies Inc (WTS) Shares Fall 5.1% -- GF Value Says Still Overvalued - GuruFocus — GuruFocus Oct 28, 2026 negative
- NEWS Watts Water Technologies (WTS) Falls 4.79% to $344.06, Landing Squarely in the Middle of Its Range - Gap Fill Strategy - — https://www.siam.in/ Oct 28, 2026 negative
- NEWS Watts Water Technologies (WTS) Projected to Post Earnings on Wednesday - MarketBeat — MarketBeat Oct 28, 2026 neutral
- NEWS WTS Q3'26 Earnings: revenue estimate is 692.57M USD - TradingView — TradingView Oct 28, 2026 neutral
- NEWS Watts Water Technologies Q3 2026 Earnings Date and Estimates - MarketBeat — MarketBeat Oct 28, 2026 neutral
Latest item Oct 28, 2026 · Generated 2026-11-05T11:44:09Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHProductresidential and commercial flow control products61%10-K Item 1: 'Residential & commercial flow control and protection products accounted for approximately 61%...of our total net sales in 2025'
- HIGHSuppliersingle-sourced international components10-K Item 1A: 'We also source certain components and finished goods internationally, including some that are single-sourced.'
- LOWCustomertop 10 customers23%10-K Item 1: 'Our top ten customers accounted for $570.3 million, or 23.4%, of our total net sales in 2025'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
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Price Targets
Position Sizing
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Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $353.30, but acceptable to hold if already in. Reasons: Concentration risk — Product: residential and commercial flow control products (61.0%); Concentration risk — Supplier: single-sourced international components. Chart setup: RSI 49 mid-range, Bollinger mid-band. Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Analyst target $351.23 reached (−0.6%), stop $329.58 (−7.2%), A.R:R -0.1:1. Score 5.9/10, moderate confidence.
Analyst target $351.23 reached (−0.6% from $353.30); no take-profit level is published. Analyst target $351.23 reached (−0.6%), stop $329.58 (−7.2%), A.R:R -0.1:1. Stop-loss: $329.58.
Concentration risk — Product: residential and commercial flow control products (61.0%); Concentration risk — Supplier: single-sourced international components; Analyst target reached - limited upside remaining.
Watts Water Technologies, Inc. trades at a P/E of 30.9 (forward 25.2). TrendMatrix value score: 4.1/10. Verdict: Hold.
15 analysts rate WTS, with a consensus score of 3.6/5. 7 analysts publish price targets averaging $404.
What does Watts Water Technologies, Inc. do?Watts Water Technologies manufactures and sells water control, flow control, and water quality products across three...
Watts Water Technologies manufactures and sells water control, flow control, and water quality products across three geographic segments: Americas, Europe, and APMEA. Revenue comes from wholesale distributors (66% of net sales in 2025), OEMs, specialty channels, and DIY chains, with residential and commercial flow control products representing about 61% of net sales. No single customer exceeded 10% of net sales in 2025.