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WTS

WATTS WATER TECHNOLOGIES INC
6 filings tracked
industrialswater technologiesLARGE ($10B-200B)

Company Intelligence Hub

Filing history, signal momentum, and bull/bear evolution

Chronological Filing Evolution (Click to filter / toggle)

Thesis (Bull Case Evolution)

Watts Water Technologies has delivered a powerful first-quarter performance, characterized by a 21.4% jump in reported revenue to $677.3 million.…

Bullish Outlook

Antithesis (Bear Case / Structural Risks)

Despite the headline growth, a closer look at the financials reveals a troubling trend in cash generation. Free cash flow collapsed to $6.6 million from $45.6 million in the prior-year period, driven by a massive surge in working capital requirements.…

Risk Factors

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Synthesis (Verdict & Resolution)

The first quarter results present a dichotomy between top-line momentum and cash-flow efficiency. On one hand, the company is demonstrating impressive pricing power and capturing a unique window of opportunity in the industrial cooling and data center markets. The shift from a restructuring phase to an operational growth phase has unlocked significant operating leverage, as evidenced by the sharp rise in net income to $99.6 million. However, the stark decline in the cash conversion rate suggests that the cost of this growth is high. Investors must weigh the excitement of 21.4% revenue growth against the reality of a deteriorating free cash flow profile. The ultimate success of the current strategy depends on whether Watts can translate its pricing power into sustainable cash flow and successfully integrate its recent acquisitions without triggering goodwill impairments.

Selected Quarter

Core Takeaway

Watts is successfully leveraging pricing power and data center demand to grow the top line, but working capital inefficiencies are draining cash.

Investor Lens

The trade-off is between impressive earnings growth and a worrying slide in liquidity and cash flow efficiency.

Watch Next

Quarterly free cash flow recovery and the impact of new U.S. tariffs on gross margins.

View Full SEC Report

Signal Momentum Chart

Quarterly net bull/bear signal ratio. Click nodes to select a quarter.

BULLISH (+1.0)NEUTRAL (0.0)BEARISH (-1.0)+0.53Q2 '26 (10-Q)

Signal Timeline

Active Filters:Quarter: Q2 '26 (10-Q)
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%
bullishMay 7

Net income rose 34.3% to $99.6 million driven by strong sales and lower restructuring costs.

earnings beat
90%
bullishMay 7

Operating income surged 51.7% due to price realization and volume leverage.

margin expansion
70%
bullishMay 7

Declared a quarterly dividend of $0.63 per share.

dividend change
50%
neutralMay 7

Completed multiple strategic acquisitions including Superior and Saudi Cast to expand market reach.

acquisition
60%

Filing History

10-QMay 7, 2026
Expand Sequence

The first quarter results present a dichotomy between top-line momentum and cash-flow efficiency. On one hand, the company is demonstrating impressive pricing power and capturing a unique window of opportunity in the industrial cooling and data center markets. The shift from a restructuring phase to an operational growth phase has unlocked significant operating leverage, as evidenced by the sharp rise in net income to $99.6 million. However, the stark decline in the cash conversion rate suggests that the cost of this growth is high. Investors must weigh the excitement of 21.4% revenue growth against the reality of a deteriorating free cash flow profile. The ultimate success of the current strategy depends on whether Watts can translate its pricing power into sustainable cash flow and successfully integrate its recent acquisitions without triggering goodwill impairments.

Disclaimer: The synthesis provided is generated by AI models and should not be construed as investment advice. Analysis is based solely on regulatory data present at the time of publication. Consult a financial advisor for specific investment strategies.