Watts Water TechnologiesWTS -0.01%89 Gross Margin % is 48.15% as of Mar. 2026, which is 14% above its 10-year median of 42.37. GuruFocus rates WTS with a GF Score™ of 89/100 and a GF Value™ of $252.92 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 3,003 Industrial Products companies, Watts Water Technologies ranks better than 88.81% on this metric.
Watts Water Technologies (NYSE:WTS) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Watts Water Technologies had a gross margin of 48.15% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Watts Water Technologies Gross Margin % Related Terms
Watts Water Technologies Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Industrial Machinery subindustry, Watts Water Technologies's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Watts Water Technologies Gross Margin % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Watts Water Technologies's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Watts Water Technologies's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Watts Water Technologies (WTS) has a Gross Margin % of 48.15% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Watts Water Technologies and its competitors. This is 14% above median its historical median of 42.37. Over the past decade, Watts Water Technologies' Gross Margin % has ranged from 40.45 to 49.46. According to the industry distribution chart, Watts Water Technologies ranks #336 out of 3003 companies in the Industrial Products industry, placing it in the top 11.2%.
Is Watts Water Technologies' Gross Margin % too high?
Watts Water Technologies' current Gross Margin % of 48.15% is 14% above median its 10-year median of 42.37. Over the past 10 years, this metric has ranged from a low of 40.45 to a high of 49.46. The Industrial Products industry median Gross Margin % is 26.79. Watts Water Technologies' value of 48.15% is 79.7% above this industry median. Based on the distribution chart, Watts Water Technologies ranks #336 out of 3003 companies in the Industrial Products industry, which is in the top quartile — a strong position relative to peers. Overall, Watts Water Technologies has a GF Score™ of 89/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Watts Water Technologies' Gross Margin % compare to CR and GTLS?
According to the Industrial Products industry distribution chart, Watts Water Technologies ranks #336 out of 3003 companies for Gross Margin %. This places Watts Water Technologies in the top 11% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 26.79. Watts Water Technologies' value of 48.15% is 79.7% above this benchmark. Historically, Watts Water Technologies' own Gross Margin % has ranged from 40.45 to 49.46 over the past decade. While the company's 10-year median is 42.37 vs. the industry median of 26.79, Watts Water Technologies has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for an Industrial Products company?
The median Gross Margin % among Industrial Products companies is 26.79, based on 3,003 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Watts Water Technologies's current Gross Margin % of 48.15% is 79.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Watts Water Technologies and its competitors. For the Industrial Products industry, the median Gross Margin % is 26.79 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Watts Water Technologies's current Gross Margin % is 48.15%, which is 14% above median its own 10-year median of 42.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Watts Water Technologies stock overvalued right now?
Based on GuruFocus' analysis, Watts Water Technologies (WTS) is currently considered Significantly Overvalued. The stock's GF Value™ is $252.92, compared to a current price of $375.04 — trading 48.3% above its estimated fair value. The current Gross Margin % is 48.15%, which is 14% above median its 10-year median of 42.37 and 79.7% above the Industrial Products industry median of 26.79. Watts Water Technologies' overall GF Score™ is 89/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Watts Water Technologies (WTS), the current Gross Margin % is 48.15% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Watts Water Technologies (WTS) Overvalued in 2026?
Based on GuruFocus' analysis, Watts Water Technologies stock appears to be overvalued.
The current stock price of $375.04 is trading 48.3% above its estimated GF Value™ of $252.92.
GuruFocus considers Watts Water Technologies to be Significantly Overvalued.
Key valuation signals for WTS:
Gross Margin %: 48.15% (14% above median its 10-year median of 42.37)
GF Value™: $252.92 vs. price of $375.04 (48.3% above fair value)
Industry Position: 79.7% above the Industrial Products median (#336 of 3003)
No single metric tells the full story. See the WTS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Watts Water Technologies Inc is a U.S.-based company that provides safety, energy efficiency, and water conservation products. Its product portfolio includes residential and commercial flow control products, which are sold for plumbing and hot water applications; HVAC and gas products, including commercial boilers, water heaters, heating solutions, etc.; drainage and water reuse products, including drainage products and engineered rainwater-harvesting solutions; and water quality products, including point-of-use and point-of-entry water filtration, conditioning, and scale prevention systems. Its products are marketed through brands like Watts, Apex, Bradley, Nexa, and others. Geographically, the company derives its key revenue from the Americas, followed by Europe and the APMEA region.
89GF Score
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