4 models fit Watts Water Technologies Inc. Class A Common Stock and they disagree: 1 of 4 land within 15% of the average. The price is above every model.
Two or more of our models back this value.
Large premium(i)Silver68
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionWatts Water Technologies Inc. Class A Common Stock (WTS)
Fair value (4 models)
$191
ACCE price target
$343
Rating
Overvalued
Horizon
12 months
Fair value published on 21 Oct 2026, 13:04 CEST; previously $213 since 12 Oct 2026, 00:00 CEST.
ACCE price target published on 10 Oct 2026, 00:00 CEST.
Rating published on 21 Oct 2026, 13:04 CEST.
Price used: $359 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, P/E comparison, EV/EBITDA comparison, and Graham number.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
87.6% above
-46.7% to fair value
ACCE score
70
out of 100
Analysts
30% buy
10 covering
P/E
31.2x
forward 25.3x
1-year return
+28.8%
Dividend yield
0.60%
Watts Water Technologies Inc. Class A Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Watts Water Technologies makes the valves, backflow preventers, drains, and water-quality products that plumbers and engineers specify into commercial and residential buildings, along with a growing line of flow-control and monitoring hardware. The moat is specification: once a product is written into a building's plans and approved by local code officials, replacement demand is sticky and pricing holds better than in commodity valves. A 48.9% gross margin and 20.9% operating margin, against 18.6% revenue growth, point to a business that is both growing and keeping most of what it sells. The near-term driver is the recurring replacement cycle in aging North American buildings combined with tighter water-safety codes, which lift demand for backflow and drainage products. At a 25.3x forward P/E and a 18.8% return on equity, the stock is priced for continued execution rather than cheap, so the question for the deeper look is whether margins hold as growth slows.
⚠ Investor warnings · 2 flagsAI-assisted·How I use AI
moderate
Valuation stretched vs model
Price trades 87.6% above the model fair value of $191.27, and P/E is 31.2 against a forward P/E of 25.3. Expectations already assume strong growth continues.
moderate
ACCE score down sharply
ACCE score fell 7 points over 90 days, from 78 to 71, with the valuation component at 42 the weakest reading. Insiders sold $1.36M and bought nothing in the last 10 disclosed transactions.
AI research notes
AI-assisted·How I use AIWritten Oct 20, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue grew 18.6% year over year, well ahead of the 10.1% average annual pace over the past five years.
Free cash flow of $356M over the last twelve months, with debt at just 0.10 times equity, leaves room to fund growth.
Latest quarterly earnings beat expectations, coming in at 3.66 per share against 3.34 expected, a 9.6% surprise.
Why it could disappoint
At $358.73, the shares trade 87.6% above the model fair value of $191.27, the consensus of four valuation models.
The trailing P/E of 31.2x and forward P/E of 25.3x both sit above the sector median forward P/E of 23.8x.
A free cash flow yield of just 3.0% leaves little margin for error if construction and replacement demand slows.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 4, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where WTS's valuation models land
Price
$358.73
Model fair value
$191
Model range
$118 to $296
Fair value $191
Price $359
The price is above the whole model range.
Model
Fair value
Upside
Discounted cash flow
Dividend discount
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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