Watsco, Inc.
AI Valuation
AI-generated fair value estimate for this company.
AI Fair Value
$333.50
Market Price
$310.90
Undervalued By
6.8%
Method: 10-year unlevered FCF DCF: $697.14M TTM free cash flow base; 5% annual FCF growth years 1-5, 3.5% years 6-10; 9% discount rate; 2.75% terminal growth; $71.08M net debt; 38.59M total shares outstanding (Class A + Class B combined).
Reasoning: Watsco is the largest HVAC/R distributor in the Americas with a durable replacement-driven demand base, a long M&A/joint-venture track record, and minimal leverage, supporting an above-GDP growth rate and a premium (low) discount rate; Class B shares carry the same economic claim on cash flow as Class A.