One-glance verdict
Within fair range
$297.44 our estimate vs market $356.02
Wall Street consensus: $404.00 (35.8% higher than our fair-value estimate)
20% above our estimate
Fundamentals snapshot
Watts Water Technologies, Inc.
WTS · NYQ · Industrials · Specialty Industrial Machinery
Current price
$356.02
52-week range
$260.00 - $394.54
Market cap
$11.89B
Balance sheet
Healthy
43.69x Strong cushion
Net cash $136.10M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 9.8% last year.
- Reward Returns 18.8% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 28.5% above its 5-year average P/E.
What this company does
Watts Water Technologies, Inc.
Watts Water Technologies makes the essential "behind-the-walls" parts like valves, drains, and water heaters that control water flow and energy use in buildings. These products are crucial for safety, water conservation, and basic plumbing in everything from homes to hospitals. The company mainly sells to wholesale distributors, so its success is tied to both new construction projects and the constant need to repair and upgrade existing buildings.
How the company got here
Founded in 1874 by Joseph E. Watts, the company started as a small machine shop in Massachusetts supplying parts to textile mills. A key invention was the temperature and pressure relief valve, which prevented dangerous explosions in hot water heaters and boilers. This innovation became so crucial that the U.S. Army required them on all their hot water tanks during World War II. Over the years, the company expanded by acquiring other businesses and became a publicly traded company in 1986, growing into a global manufacturer of water-related products.
What it actually does
Watts Water Technologies makes a wide variety of products that control the flow, heating, quality, and drainage of water in and around buildings. You might not see their products every day, but they are essential for things to work safely and efficiently behind the walls. For example, they make the valves that prevent contaminated water from flowing backward into your clean water supply, and devices that regulate water pressure to protect your pipes and appliances. They also produce systems for heating water, draining rainwater, and filtering water to make it safe to drink.
Residential & Commercial Flow Control
This is the company's largest business area, making up about 60% of its sales. It includes essential plumbing and safety devices for both homes and commercial buildings like offices and hospitals. Products in this segment include backflow preventers (which stop dirty water from mixing with clean water), water pressure regulators (which protect your plumbing from pressure spikes), and temperature and pressure relief valves for water heaters. Plumbers, contractors, and building maintenance professionals are the primary customers for these critical components.
HVAC & Gas
This segment, representing roughly a quarter of the company's business, focuses on products for heating, ventilation, and air conditioning (HVAC) systems, as well as for gas plumbing. This includes high-efficiency boilers and water heaters for commercial buildings, and systems for under-floor radiant heating. They also make flexible stainless-steel connectors used for natural gas lines in places like restaurant kitchens. The customers are typically mechanical contractors and companies that install and service heating and gas systems.
Drainage & Water Re-use
A smaller but important part of the company, this segment provides solutions for managing water runoff and reusing it. This includes a variety of drains for residential, commercial, and industrial settings. They also engineer systems for harvesting rainwater, which can then be used for things like irrigation or flushing toilets, helping to conserve water. These products are sold to contractors and builders focused on plumbing and sustainable building practices.
Water Quality
This is the smallest segment, focusing on products that improve the quality of water. It includes a range of filtration and treatment solutions for homes, businesses, and industrial applications. For example, they offer systems that can be installed to filter all the water entering a building or smaller units that filter water at a specific sink. The goal is to provide clean and safe water for drinking, cooking, and other uses.
What management is betting on now
The company is focused on growing by developing "smart and connected" products that allow for remote monitoring and control of water systems. They are also concentrating on products that promote safety, energy efficiency, and water conservation, as these are increasingly important due to regulations and customer demand. A key part of their strategy involves acquiring other companies to add new products and expand into new markets. Management also emphasizes generating strong free cash flow (the cash left over after paying for operating expenses and capital expenditures), which allows them to invest in growth, make acquisitions, and return money to shareholders through dividends (a portion of profits paid out to investors).
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 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
FY2026 Q2
$91.60M
Revenue
$763.20M
Net income
$118.30M
Diluted EPS
3.53
Operating cash flow
$102.90M
Free cash flow
$91.60M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $297.44 vs current price $356.02
Wall Street consensus is the average analyst price target: $404.00 (35.8% higher than our fair-value estimate).
Our most-likely fair value is $297.44 a share — about 16.5% away from today's price of $356.02, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $136.1M - more cash than debt. Interest coverage 43.7x.
Net debt
$-136.10M
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 $211.80M Interest coverage 43.69x This is the baseline the peer rows are being compared against.
Total debt $1.76B Interest coverage 13.41x -69% vs WTS Carries about 3.3x less debt cushion than WTS.
Total debt $677.20M 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
1 Risk
Rewards
-
Revenue grew 9.8% last year.
-
Returns 18.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 28.5% above its 5-year average P/E.
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)
31.07x
Forward P/E
25.36x
P/B
5.67x
P/S
4.44x
EV/EBITDA
20.22x
PEG ratio
3.16x
Profitability
How much profit each dollar creates
Gross margin
48.9%
Operating margin
20.9%
Net margin
14.3%
ROE
18.8%
ROA
11.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.10x
Current ratio
2.66x
Quick ratio
1.48x
Total debt
$211.80M
Total cash
$347.90M
Growth
How the business has been compounding
Revenue TTM
$2.68B
Revenue 5Y CAGR
7.7%
EPS TTM
11.46
EPS 5Y CAGR
10.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$397.90M
Free CF TTM
$356.30M
FCF margin
13.3%
Dividend
Shareholder payout
Yield
0.7%
Payout ratio
19.1%
Last ex-div date
2026-09-01