WSO NYSE Russell 1000 Earnings call
Watsco (WSO) · Q2 2026 results and valuation
Share price: $313.15 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · published 29 Jul 2026 and 28 Apr 2026
Net income up 75.7% on the previous quarter. Management sounded upbeat, though noticeably less so answering analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+75.7%
Net income vs Q1 2026
Net income 163.3M vs 92.9M
Revenue +37.3%
Against the same quarter last year (Q2 2025) it is −11.0%, so the move on last quarter looks seasonal or timing-related rather than a trend.
2 · How management spoke
Upbeat
More upbeat than 71% of company calls
Answers to analysts: restrained, but clearly less so than the script.
Last call it was different: script and answers matched.
3 · What stood out
Key theme
WSO expects contractor behavior to evolve in ways that benefit the technology-enabled distributor in the long term and grow customer businesses.
Valuation
Is Watsco undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At −0.2% growth a year (3-year revenue growth), the model's fair value is $165.68 a share — the stock trades 89% above it. Today's price assumes 8.8% growth a year.
Current price
$313.15
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+8.8% for 10 yrs
Fair value / share
$165.68
Buy below
$124.26
Price vs fair value
Overvalued 89%
Price vs buy-below price
Overvalued 152%
Read between the lines
-
Figure
Sales increased 2% to $2.1 billion, indicating growth in revenue for the quarter.
Source quote
“Sales increased 2% to $2.1 billion.”
-
Dropped
Some customers purchased ahead of Section 232 tariff price increases, but the company does not believe this inventory situation is particularly material.
Source quote
“There were some customers that bought ahead of the price increases coming now from the Section 232 tariffs, but by the end... Some of our customers hold some inventory, and we do not have visibility into those numbers, but I do not think it is particularly material.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 87% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“I would say just to double down on that, Barry, to know Jim and Jennifer and their team is to love Jim and Jennifer and their team because they are...”
“And finally, develop and launch technologies that help our customers grow their own businesses so they can drag us along with their growth.”
“At our Investor Day last year, we communicated several new initiatives that leverage our technology advantage and represent new growth opportunities that will materialize in the years ahead.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.10B | 1.53B | +37.3% | 2.06B | +2.1% |
| Gross profit | 578.9M | 427.6M | +35.4% | 603.5M | −4.1% |
| Operating income | 238.4M | 110.2M | +116.3% | 271.9M | −12.3% |
| Net income | 163.3M | 92.9M | +75.7% | 183.6M | −11.0% |
| EPS | 4.00 | 1.87 | +113.9% | 4.52 | −11.5% |
| P/E today 25.0 | 35.7 | 29.8 | +5.9 | 33.7 | +2.0 |
Topics
Most discussed now
- Rising In the medium and long term, Watsco is super ambitious and it has its sights set on 30% gross margins in...
- Through widespread adoption and use of Watsco's technologies, revolutionize its customer experience so that contractors, installers and…
- In terms of penetration, e-commerce reached 37% of total sales over the last 12 months with...
- E-commerce sales have grown 13%, well outpacing overall...
- These investments, along with Watsco's scale, entrepreneurial culture and...
Faded since Q1 2026
- Dropped There is broad-based growth there, and it is not necessarily a read on repair versus replace all the time.
- Dropped There is no inflection point here, but things did get incrementally better as the quarter progressed, and Watsco exited the...
- Dropped Watsco had multiple regulatory changes that changed the products that sold—almost 100% of the equipment it sold—twice in that period.
- Dropped With its tooling, one of the benefits is that Watsco can appropriately adjust pricing for all customers for all SKUs...
Latest announcements
Official filings, newest first.
- Unregistered share sale · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Current report · SEC 8-K
- Shareholder vote results · SEC 8-K
- Unregistered share sale · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K