One-glance verdict
Overvalued
$271.01 our estimate vs market $347.79
Wall Street consensus: $358.33 (32.2% higher than our fair-value estimate)
28% above our estimate, beyond the bull case
Fundamentals snapshot
Watts Water Technologies, Inc.
WTS · NYQ · Industrials · Specialty Industrial Machinery
Current price
$347.79
52-week range
$251.17 - $394.54
Market cap
$11.61B
Balance sheet
Healthy
43.69x Strong cushion
Net cash $69.70M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 4.9% last year.
- Reward Returns 18.9% on equity, ahead of 60% of its peers.
- Risk Stock trades 31.5% above its 5-year average P/E.
- Risk Insider ownership is only 1.0% (peer median: 4.0%).
What this company does
Watts Water Technologies, Inc.
Watts Water Technologies makes essential plumbing, heating, and water safety products that go into all types of buildings, from homes to factories. The company primarily sells these crucial items like valves, drains, and boilers through wholesale distributors, benefiting from the constant need for these parts in both new construction and building repairs.
How the company got here
Founded in 1874 by Joseph Watts, the company started by making pressure-reducing valves to prevent steam-powered boilers in textile mills from exploding. A key invention was the temperature and pressure (T&P) relief valve, which became a safety standard and was required by the U.S. Army for all its hot water tanks during World War II. Over the decades, the company expanded from this single safety product into a wide range of technologies that control and conserve water and energy in buildings. It grew by developing new products and acquiring other companies, eventually becoming a global leader in its field.
What it actually does
Watts Water Technologies makes a huge variety of products that manage the flow of water and energy in and around buildings like homes, offices, and factories. Think of all the hidden-away parts that make your plumbing and heating work safely and efficiently: that's what Watts makes. This includes everything from the valves that prevent contaminated water from flowing backward into your clean water supply to high-efficiency boilers and systems that filter your drinking water. Their products are essential for safety, water conservation, and energy efficiency in almost any building.
Americas
This is the company's largest business segment, making up the majority of its sales. It sells a broad range of the company's products across North and South America for use in both residential and commercial buildings. The customers are typically wholesale distributors who then sell to plumbers and contractors, as well as specialty dealers and retail chains. This segment focuses on products for plumbing, heating, and ensuring water quality.
Europe
The European segment is a significant, but smaller, part of the company's business. It provides similar products to the Americas, such as valves and controls for plumbing and heating systems, but tailored to European building codes and market needs. A key part of this business is selling components to original equipment manufacturers (OEMs), which are companies that make their own branded products (like boilers) and include Watts' parts inside them. This segment has grown in part by acquiring local European companies to establish a stronger presence.
APMEA (Asia-Pacific, Middle East, and Africa)
This is the smallest of the company's geographic segments, representing its business in a wide and diverse range of developing and mature markets. Like in its other regions, Watts sells products that help with water safety, efficiency, and control. It serves a mix of customers, including selling to manufacturers of water heaters and bathroom fixtures. This segment provides a platform for future growth in parts of the world with increasing needs for modern water infrastructure.
What management is betting on now
Management's strategy focuses on providing complete solutions rather than just individual parts, with an emphasis on safety, energy efficiency, and water conservation. They are investing in "smart and connected" products, which means adding sensors and data capabilities to things like leak detection systems to make buildings more intelligent and prevent damage. The company is also focused on sustainability, both by making its own operations more efficient and by creating products that help its customers save water and energy. This aligns with global trends and regulations that demand more environmentally friendly buildings.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$78.50M
FY2024 Q3
$84.30M
FY2024 Q4
$127.50M
FY2025 Q1
$45.60M
FY2025 Q2
$59.50M
FY2025 Q3
$110.90M
FY2025 Q4
$140.30M
FY2026 Q1
$6.60M
Revenue
$677.30M
Net income
$99.60M
Diluted EPS
2.97
Operating cash flow
$17.90M
Free cash flow
$6.60M
Fetching…
Sources
Revenue
$625.10M
Net income
$83.70M
Diluted EPS
2.50
Operating cash flow
$154.70M
Free cash flow
$140.30M
Fetching…
Sources
Revenue
$611.70M
Net income
$82.20M
Diluted EPS
2.45
Operating cash flow
$122.40M
Free cash flow
$110.90M
Fetching…
Sources
Revenue
$643.70M
Net income
$100.90M
Diluted EPS
3.01
Operating cash flow
$69.70M
Free cash flow
$59.50M
Fetching…
Sources
Revenue
$558.00M
Net income
$74.00M
Diluted EPS
2.21
Operating cash flow
$55.20M
Free cash flow
$45.60M
Fetching…
Sources
Revenue
$540.40M
Net income
$67.50M
Diluted EPS
2.02
Operating cash flow
$139.50M
Free cash flow
$127.50M
Fetching…
Sources
Revenue
$543.60M
Net income
$69.10M
Diluted EPS
2.06
Operating cash flow
$90.70M
Free cash flow
$84.30M
Fetching…
Sources
Revenue
$597.30M
Net income
$82.00M
Diluted EPS
2.44
Operating cash flow
$85.30M
Free cash flow
$78.50M
Fetching…
Sources
Is it cheap or expensive?
Fair value $271.01 vs current price $347.79
Wall Street consensus is the average analyst price target: $358.33 (32.2% higher than our fair-value estimate).
Our most-likely fair value is $271.01 a share — about 22.1% below today's price of $347.79, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $69.7M - more cash than debt. Interest coverage 43.7x.
Net debt
$-69.70M
Interest coverage
43.69x
Watts Water Technologies, Inc.'s profit covers its interest bill about 43.7 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
WTS
BASELINE
Watts Water Technologies, Inc.
Total debt $305.00M Interest coverage 43.69x This is the baseline the peer rows are being compared against.
Total debt $676.70M Interest coverage 53.93x +23% vs WTS Carries about 1.2x more debt cushion than WTS.
Total debt $550.50M Interest coverage 10.09x -77% vs WTS Carries about 4.3x less debt cushion than WTS.
Total debt $1.89B Interest coverage 11.18x -74% vs WTS Carries about 3.9x less debt cushion than WTS.
Total debt $308.32M Interest coverage 25.34x -42% vs WTS Carries about 1.7x less debt cushion than WTS.
What you should know
The case for and against WTS
3 Rewards
2 Risks
Rewards
-
Revenue grew 4.9% last year.
-
Returns 18.9% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 31.5% above its 5-year average P/E.
-
Insider ownership is only 1.0% (peer median: 4.0%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
31.79x
Forward P/E
26.36x
P/B
5.54x
P/S
4.54x
EV/EBITDA
20.45x
PEG ratio
3.63x
Profitability
How much profit each dollar creates
Gross margin
49.2%
Operating margin
19.7%
Net margin
14.3%
ROE
18.9%
ROA
11.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.15x
Current ratio
2.72x
Quick ratio
1.52x
Total debt
$305.00M
Total cash
$374.70M
Growth
How the business has been compounding
Revenue TTM
$2.56B
Revenue 5Y CAGR
7.7%
EPS TTM
10.94
EPS 5Y CAGR
10.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$364.70M
Free CF TTM
$356.30M
FCF margin
13.9%
Dividend
Shareholder payout
Yield
0.7%
Payout ratio
19.0%
Last ex-div date
2026-06-01