📊 WTS Key Takeaways
Is Watts Water Technologies Inc. (WTS) a Good Investment?
WTS demonstrates strong profitability with healthy margins (48% gross, 20% operating) and solid 8% revenue growth, supported by a fortress balance sheet with minimal leverage. However, the significant disconnect between reported net income of $99.6M and operating cash flow of only $17.9M raises critical quality of earnings concerns requiring investigation.
Watts Water Technologies Inc. Key Strengths (WTS)
- Robust profitability margins: 48.1% gross margin, 19.6% operating margin, 14.7% net margin
- Solid revenue growth of 8.3% YoY demonstrating market demand
- Fortress balance sheet with minimal leverage (0.09x debt/equity) and $374.7M cash
- Excellent liquidity position with 2.72x current ratio and 1.62x quick ratio
- Exceptional interest coverage of 51.2x indicating virtually zero default risk
WTS Stock Risks: Watts Water Technologies Inc. Investment Risks
- Major cash flow deterioration: $99.6M net income but only $17.9M operating cash flow signals working capital problems or earnings quality issues
- Net income growth stalled at 0% YoY despite 8.3% revenue growth, indicating margin compression
- Critically low free cash flow of $6.6M (1% FCF margin) severely limits capital allocation and growth reinvestment capacity
Key Metrics to Watch
- Operating cash flow trend - must improve to validate earnings sustainability
- Working capital changes - identify source of cash conversion deterioration
- Gross margin trajectory - assess if recent compression is structural or temporary
Watts Water Technologies Inc. (WTS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 1.0% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.72x current ratio provides a solid financial cushion.
WTS Profit Margin, ROE & Profitability Analysis
WTS vs Materials Sector: How Watts Water Technologies Inc. Compares
How Watts Water Technologies Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Watts Water Technologies Inc. Stock Overvalued? WTS Valuation Analysis 2026
Based on fundamental analysis, Watts Water Technologies Inc. has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Watts Water Technologies Inc. Balance Sheet: WTS Debt, Cash & Liquidity
WTS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Watts Water Technologies Inc.'s revenue has grown significantly by 35% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.82 reflects profitable operations.
WTS Revenue Growth, EPS Growth & YoY Performance
WTS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $558.0M | $74.0M | $2.21 |
| Q3 2025 | $543.6M | $69.1M | $2.06 |
| Q2 2025 | $597.3M | $82.0M | $2.44 |
| Q1 2025 | $558.0M | $72.6M | $2.17 |
| Q3 2024 | $504.3M | $65.8M | $1.96 |
| Q2 2024 | $532.8M | $75.9M | $2.26 |
| Q1 2024 | $471.7M | $64.7M | $1.93 |
| Q3 2023 | $487.8M | $58.7M | $1.75 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Watts Water Technologies Inc. Dividends, Buybacks & Capital Allocation
WTS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Watts Water Technologies Inc. (CIK: 0000795403)
📋 Recent SEC Filings
❓ Frequently Asked Questions about WTS
What is the AI rating for WTS?
Watts Water Technologies Inc. (WTS) has an AI grade of B with 62% confidence, based on fundamental analysis of SEC EDGAR filings.
What are WTS's key strengths?
Claude: Robust profitability margins: 48.1% gross margin, 19.6% operating margin, 14.7% net margin. Solid revenue growth of 8.3% YoY demonstrating market demand.
What are the risks of investing in WTS?
Claude: Major cash flow deterioration: $99.6M net income but only $17.9M operating cash flow signals working capital problems or earnings quality issues. Net income growth stalled at 0% YoY despite 8.3% revenue growth, indicating margin compression.
What is WTS's revenue and growth?
Watts Water Technologies Inc. reported revenue of $677.3M.
Does WTS pay dividends?
Watts Water Technologies Inc. does not currently pay dividends.
Where can I find WTS SEC filings?
Official SEC filings for Watts Water Technologies Inc. (CIK: 0000795403) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is WTS's EPS?
Watts Water Technologies Inc. has a diluted EPS of $2.97.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is WTS's fundamental grade?
Based on our AI fundamental analysis in June 2026, Watts Water Technologies Inc. has a B grade with 62% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is WTS stock overvalued or undervalued?
Valuation metrics for WTS: ROE of 4.8% (sector avg: 14%), net margin of 14.7% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is WTS's AI grade for 2026?
Our dual AI analysis gives Watts Water Technologies Inc. a combined B grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is WTS's free cash flow?
Watts Water Technologies Inc.'s operating cash flow is $17.9M, with capital expenditures of $11.3M. FCF margin is 1.0%.
How does WTS compare to other Materials stocks?
Vs Materials sector averages: Net margin 14.7% (avg: 10%), ROE 4.8% (avg: 14%), current ratio 2.72 (avg: 1.6).