What is Watsco Inc worth?
With the base-case assumptions below, a discounted cash flow model on Watsco Inc's reported free cash flow gives $305.44 per share. The share price was $317.23 on September 25, 2026, 4% above that value.
Inputs from the filings
Three sets of assumptions
| Case | Growth yrs 1-5 | Discount rate | Value per share | Value vs price |
|---|---|---|---|---|
| Bear | 2.5% | 10.0% | $193.01 | -39% |
| Base | 7.5% | 9.0% | $305.44 | -4% |
| Bull | 12.5% | 8.0% | $529.62 | +67% |
Sensitivity: base case value per share
| 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | |
|---|---|---|---|---|---|
| 7.0% | $389.01 | $414.59 | $445.86 | $484.94 | $535.19 |
| 8.0% | $326.59 | $343.19 | $362.79 | $386.32 | $415.08 |
| 9.0% | $281.01 | $292.35 | $305.44 | $320.71 | $338.76 |
| 10.0% | $246.31 | $254.37 | $263.51 | $273.96 | $286.02 |
| 11.0% | $219.03 | $224.95 | $231.56 | $238.99 | $247.42 |
Where the presets come from
Base: years 1 to 5 grow at Watsco Inc's revenue growth rate over the last 5 fiscal years (7.4% a year), held between -5% and 15%. Years 6 to 10 grow halfway between that and the long-run rate of 2.5%. Future cash is discounted at 9% a year.
Bear: 5 points less growth, 2% long-run growth, 10% discount rate. Bull: 5 points more growth (at most 25%), 3% long-run growth, 8% discount rate.
Value per share = (present value of 10 years of free cash flow + present value of everything after + cash - debt) / diluted shares.
This is a model run on assumptions, not a recommendation or a price target. Small changes in the discount rate or growth move the result a lot, as the table above shows. Change them yourself in the calculator.
Adjust the assumptions
Move the sliders for growth, long-run growth and discount rate, or switch to average free cash flow, and see the value per share change.
Adjust the assumptions