Watsco, Inc.
WSO Industrials Industrial Distribution
Watsco, Inc.’s revenue for fiscal 2025 (year ended December 2025) was $7.2 billion, down 4.98% from fiscal 2024. In the quarter to June 2026, revenue grew 2.06%, EPS fell 11.5%, free cash flow grew 17.6% and total debt rose 815.5%, each against the same quarter a year earlier. Dividend growth for ten consecutive years.
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Watsco, Inc. (WSO) Altman Z-score
Watsco, Inc.'s Altman Z-score for fiscal 2025 is 9.62, in the safe zone (above 2.99).
Altman Z-score, annual
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Annual newest first
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2025 | 9.62 | (1.14) |
| FY2024 | 10.76 | (1.30) |
| FY2023 | 12.05 | 3.99 |
| FY2022 | 8.06 | (1.55) |
| FY2021 | 9.61 | (0.56) |
| FY2020 | 10.17 | 2.53 |
| FY2019 | 7.65 | (1.16) |
| FY2018 | 8.80 | (1.59) |
| FY2017 | 10.39 | 1.88 |
| FY2016 | 8.51 | 0.69 |
How fiscal 2025’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | 0.51 | — | 0.61 | |
| Retained earnings / total assets | 0.30 | — | 0.42 | |
| EBIT / total assets | 0.16 | — | 0.54 | |
| Market value of equity / total liabilities | 10.69 | — | 6.41 | |
| Sales / total assets | 1.64 | — | 1.64 | |
| Altman Z-score | Safe zone | 9.62 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Safe zone | 8.23 | ||
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| AIT Applied Industrial Technologies, Inc. compare | 10.5× |
| WSO.B Watsco, Inc. compare | 9.7× |
| WSO Watsco, Inc. | 9.6× |
| MSM MSC Industrial Direct Company, Inc. compare | 5.3× |
| POOL Pool Corporation compare | 4.6× |
| XMTR Xometry, Inc. compare | 4.6× |
| CNM Core & Main, Inc. compare | 3.6× |
| WCC WESCO International, Inc. compare | 3.1× |
| QXO QXO, Inc. compare | 1.8× |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets