Watsco, Inc. (WSO): one to watch?

A real earnings miss on margin normalization, not a broken business — cheap now, but growth has stalled and margins keep sliding.

👀 WATCH Fundamentals57/100

Fell 13% in 1 trading day(s) — now $320.02

Why WSO dropped

Watsco's stock crashed after reporting Q2 2026 results that missed on both revenue and profit — EPS of $4.00 versus the $4.39 expected, with gross margin falling to 27.5% from 29.3% as HVAC equipment pricing normalized after last year's unusually large price hikes.

Fwd P/E 23.4Op margin 11.3%Rev growth 2.1%Debt/equity 15.2%Analyst upside 32.7%

How this scored 57/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 6.5%

✅ Generates cash Free cash flow $485M

✅ Not drowning in debt Debt/equity 15.2% (limit 200%)

✅ Can pay its bills Current ratio 3.2 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 11/25

Operating margin 11.3% 4/9

Net profit margin 6.5% 3/8

Return on equity 16.7% 5/8

Growth Is it getting bigger, or dying? 7/25

Revenue growth 2.1% 2/9

Earnings growth -11.6% 0/8

Expected profit change 12.3% 4/8

Value Is it cheap right now? 14/25

Forward P/E 23.4 5/10

PEG ratio 1.4 5/8

Analyst target upside 32.7% 4/7

Balance sheet Will it survive? 25/25

Debt / equity 15.2% 10/10

Current ratio 3.2 8/8

Free cash flow $485M 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-07-30. Research only — not financial advice.