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WatscoFRA:WC3 -1.13%86 Net Margin % is 5.16% as of Mar. 2026, which is 14% below its 10-year median of 6.01. GuruFocus rates FRA:WC3 with a GF Score™ of 86/100 and a GF Value™ of €359.71 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 158 Industrial Distribution companies, Watsco ranks better than 75.95% on this metric.
Net margin is calculated as Net Income divided by its Revenue. Watsco's Net Income for the
three
months ended in Mar. 2026 was €68 Mil. Watsco's Revenue for the
three
months ended in Mar. 2026 was €1,326 Mil. Therefore, Watsco's net margin for the quarter that ended in Mar. 2026 was 5.16%.
The historical rank and industry rank for Watsco's Net Margin % or its related term are showing as below:
FRA:WC3'
s Net Margin % Range Over the Past 10 Years
Min: 4.33 Med: 6.01 Max: 8.26
Current: 6.85
FRA:WC3's Net Margin % is ranked better than 75.95% of 158
companies
in the Industrial Distribution industry
Industry Median: 3.055
vs FRA:WC3: 6.85
Watsco (FRA:WC3) Net Margin % Explanation
Although Net Income and Earnings-per-Share (EPS) are the most widely used parameter in measuring a company's profitability and valuation, it is the least reliable. The reason is that reported earnings can be manipulated easily by adjusting any numbers such as Depreciation, Depletion and Amotorization and non-recurring items.
But the long term trend of the net margin is a good indicator of the competitiveness and health of the business.
Watsco Net Margin % Related Terms
Watsco Net Margin % Historical Data
* Premium members only.
The historical data trend for Watsco's Net Margin % can be seen below:
* 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 Industrial Distribution subindustry, Watsco's Net Margin %, along with its competitors' market caps and Net 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.
Watsco Net Margin % vs Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Watsco's Net Margin % distribution charts can be found below:
* The bar in red indicates where Watsco's Net 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.
Watsco (FRA:WC3) has a Net Margin % of 5.16% as of Mar. 2026. Net margin is the ratio of total net income to net sales. View historical data on Watsco and its competitors. This is 14% below median its historical median of 6.01. Over the past decade, Watsco's Net Margin % has ranged from 4.33 to 8.26. According to the industry distribution chart, Watsco ranks #38 out of 158 companies in the Industrial Distribution industry, placing it in the top 24.1%.
Is Watsco's Net Margin % too high?
Watsco's current Net Margin % of 5.16% is 14% below median its 10-year median of 6.01. Over the past 10 years, this metric has ranged from a low of 4.33 to a high of 8.26. The Industrial Distribution industry median Net Margin % is 3.06. Watsco's value of 5.16% is 68.9% above this industry median. Based on the distribution chart, Watsco ranks #38 out of 158 companies in the Industrial Distribution industry, which is in the top quartile — a strong position relative to peers. Overall, Watsco has a GF Score™ of 86/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Watsco's Net Margin % compare to QXO and WCC?
According to the Industrial Distribution industry distribution chart, Watsco ranks #38 out of 158 companies for Net Margin %. This places Watsco in the top 24% of its industry — outperforming the majority of peers. The industry median Net Margin % is 3.06. Watsco's value of 5.16% is 68.9% above this benchmark. Historically, Watsco's own Net Margin % has ranged from 4.33 to 8.26 over the past decade. While the company's 10-year median is 6.01 vs. the industry median of 3.06, Watsco 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 Net Margin % for an Industrial Distribution company?
The median Net Margin % among Industrial Distribution companies is 3.06, based on 158 companies in the industry. Companies in the top quartile (top 25%) have a Net Margin % significantly above this median, while those in the bottom quartile fall well below. However, Net Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Watsco's current Net Margin % of 5.16% is 68.9% 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 Net Margin % mean?
A high Net Margin % can signal that a stock is expensive relative to its fundamentals. Net margin is the ratio of total net income to net sales. View historical data on Watsco and its competitors. For the Industrial Distribution industry, the median Net Margin % is 3.06 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Watsco's current Net Margin % is 5.16%, which is 14% below median its own 10-year median of 6.01. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Watsco stock overvalued right now?
Based on GuruFocus' analysis, Watsco (FRA:WC3) is currently considered Modestly Undervalued. The stock's GF Value™ is €359.71, compared to a current price of €315.20 — trading 12.4% below its estimated fair value. The current Net Margin % is 5.16%, which is 14% below median its 10-year median of 6.01 and 68.9% above the Industrial Distribution industry median of 3.06. Watsco's overall GF Score™ is 86/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Net Margin % calculated?
Net Margin % is calculated from a company's financial statements. For Watsco (FRA:WC3), the current Net Margin % is 5.16% 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 Watsco (FRA:WC3) Overvalued in 2026?
Based on GuruFocus' analysis, Watsco stock appears to be undervalued.
The current stock price of €315.20 is trading 12.4% below its estimated GF Value™ of €359.71.
GuruFocus considers Watsco to be Modestly Undervalued.
Key valuation signals for FRA:WC3:
Net Margin %: 5.16% (14% below median its 10-year median of 6.01)
GF Value™: €359.71 vs. price of €315.20 (12.4% below fair value)
Industry Position: 68.9% above the Industrial Distribution median (#38 of 158)
No single metric tells the full story. See the FRA:WC3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Watsco is the largest HVAC and refrigeration products distributor in North America with approximately 13% market share. The company primarily operates in the United States (90% of revenue) with significant exposure in the Sunbelt states. Watsco also has operations in Canada, Latin America, and the Caribbean. The company's customer base comprises more than 120,000 dealers and contractors serving the replacement and new-construction HVAC/R markets for residential and light-commercial applications. As much as 20% of residential HVAC units are distributed through Watsco in any given year. Revenue is approximately 75%-80% residential HVAC and 20%-25% commercial, with relatively small exposure to more complex "applied" solutions.
86GF Score
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