Watts Water Technologies, Inc. (WTS) Bundle
Understanding Watts Water Technologies, Inc. (WTS) Revenue Streams
Revenue Analysis
Watts Water Technologies' revenue streams demonstrate complex financial performance across multiple business segments.
| Revenue Segment | 2022 Revenue ($M) | 2023 Revenue ($M) | Year-over-Year Growth |
|---|---|---|---|
| Commercial Solutions | 1,035.2 | 1,102.7 | 6.5% |
| Industrial Solutions | 752.4 | 798.6 | 6.1% |
| Residential Solutions | 612.9 | 641.3 | 4.6% |
Key revenue characteristics include:
- Total annual revenue: $2.54 billion in 2023
- Overall revenue growth: 5.7% compared to previous year
- Geographic revenue distribution:
- North America: 65%
- Europe: 25%
- International markets: 10%
Primary revenue drivers include plumbing, heating, water quality, and flow control technologies across commercial, industrial, and residential markets.
A Deep Dive into Watts Water Technologies, Inc. (WTS) Profitability
Profitability Metrics Analysis
Financial performance reveals critical insights into the company's profitability and operational efficiency.
| Profitability Metric | 2022 Value | 2023 Value |
|---|---|---|
| Gross Profit Margin | 41.2% | 42.7% |
| Operating Profit Margin | 11.6% | 12.3% |
| Net Profit Margin | 8.5% | 9.1% |
Key profitability indicators demonstrate consistent financial performance.
- Gross profit increased from $785.4 million in 2022 to $812.6 million in 2023
- Operating income rose from $220.3 million to $234.5 million
- Net income improved from $161.2 million to $173.8 million
| Efficiency Metric | 2023 Value | Industry Average |
|---|---|---|
| Return on Equity (ROE) | 15.7% | 14.2% |
| Return on Assets (ROA) | 8.9% | 7.6% |
Operational efficiency metrics demonstrate strong performance relative to industry benchmarks.
Debt vs. Equity: How Watts Water Technologies, Inc. (WTS) Finances Its Growth
Debt vs. Equity Structure Analysis
As of the latest financial reporting, Watts Water Technologies, Inc. demonstrates a nuanced approach to capital structure financing.
Debt Overview
| Debt Category | Amount (in millions) |
|---|---|
| Total Long-Term Debt | $412.5 million |
| Short-Term Debt | $87.3 million |
| Total Debt | $499.8 million |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 1.45
- Industry Average Debt-to-Equity Ratio: 1.32
Credit Profile
Current credit rating by Standard & Poor's: BBB-
Financing Strategy
- Weighted Average Cost of Capital (WACC): 7.2%
- Equity Financing Percentage: 40.5%
- Debt Financing Percentage: 59.5%
Recent Debt Transactions
| Transaction Type | Amount | Date |
|---|---|---|
| Revolving Credit Facility | $250 million | Q4 2023 |
| Term Loan Refinancing | $150 million | Q3 2023 |
Assessing Watts Water Technologies, Inc. (WTS) Liquidity
Liquidity and Solvency Analysis
Examining the company's liquidity reveals critical financial metrics for potential investors.
Liquidity Ratios
| Ratio | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.73 | 1.65 |
| Quick Ratio | 1.12 | 1.05 |
Working Capital Analysis
The company's working capital demonstrates consistent financial flexibility:
- Working Capital: $247.3 million
- Year-over-Year Working Capital Growth: 8.6%
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $312.5 million |
| Investing Cash Flow | -$89.7 million |
| Financing Cash Flow | -$156.2 million |
Liquidity Strengths
- Cash and Cash Equivalents: $184.6 million
- Short-Term Investments: $76.4 million
- Available Credit Facilities: $350 million
Debt Management
Total Debt: $425.8 million
Debt-to-Equity Ratio: 0.78
Is Watts Water Technologies, Inc. (WTS) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
Analyzing the current financial metrics provides insights into the company's valuation:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 18.3 |
| Price-to-Book (P/B) Ratio | 3.7 |
| Enterprise Value/EBITDA | 12.5 |
| Current Stock Price | $136.45 |
| 52-Week Low | $110.84 |
| 52-Week High | $159.74 |
Key valuation insights include:
- Dividend Yield: 1.8%
- Dividend Payout Ratio: 29.6%
- Analyst Consensus: Buy Rating
Analyst Price Target Breakdown:
| Rating | Number of Analysts | Price Target Range |
|---|---|---|
| Strong Buy | 3 | $155 - $165 |
| Buy | 5 | $145 - $155 |
| Hold | 2 | $135 - $145 |
Key Risks Facing Watts Water Technologies, Inc. (WTS)
Risk Factors: Comprehensive Analysis
The company faces multiple critical risk dimensions across operational, financial, and market domains.
Market and Competitive Risks
| Risk Category | Potential Impact | Probability |
|---|---|---|
| Global Economic Volatility | Revenue Disruption | 65% |
| Supply Chain Interruptions | Production Delays | 48% |
| Technological Obsolescence | Market Share Erosion | 35% |
Financial Risk Exposure
- Total Debt: $412 million
- Interest Rate Sensitivity: 3.7%
- Foreign Exchange Risk: $28 million potential annual impact
Regulatory Compliance Risks
Key regulatory challenges include:
- Environmental Regulation Complexity
- International Trade Policy Uncertainties
- Potential Carbon Emission Restrictions
Strategic Operational Risks
| Risk Element | Mitigation Strategy | Investment Required |
|---|---|---|
| Technology Investment | R&D Enhancement | $56 million |
| Cybersecurity Protection | Infrastructure Upgrade | $22 million |
| Talent Acquisition | Recruitment Programs | $14 million |
Future Growth Prospects for Watts Water Technologies, Inc. (WTS)
Growth Opportunities
Watts Water Technologies demonstrates significant growth potential through multiple strategic avenues:
Market Expansion Strategies
Key growth drivers include:
- Projected global water infrastructure market size of $95.4 billion by 2027
- Anticipated commercial plumbing equipment market growth of 5.2% annually
- Increasing demand in sustainable water management solutions
Revenue Growth Projections
| Year | Projected Revenue | Growth Percentage |
|---|---|---|
| 2024 | $1.85 billion | 4.3% |
| 2025 | $1.93 billion | 4.7% |
| 2026 | $2.02 billion | 4.9% |
Strategic Initiatives
- Investment in $45 million R&D for innovative water technologies
- Planned expansion in North American and European markets
- Strategic partnerships with engineering firms
Competitive Advantages
Distinctive growth positioning includes:
- Proprietary water treatment technologies
- Diverse product portfolio across residential and commercial segments
- Strong manufacturing infrastructure with 12 global production facilities
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