Watts Water Technologies Earnings Preview

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Investors braced for a bumpy ride ahead of Watts Water Technologies' (NYS: WTS) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday, Feb. 20. Watts Water Technologies designs, manufactures, and sells a line of water safety and flow control products for the water quality, water conservation, water safety, and water flow control markets.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Watts Water Technologies with nine of 13 analysts rating it hold. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $358.4 million in revenue this quarter. That would represent a rise of 13.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.60 per share. Estimates range from $0.51 to $0.63.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 98.3% giving it an "outperform" rating. Most of the community is in line with the All-Stars, with 95.4% granting it a rating of "outperform." Fools feel positively about Watts Water Technologies and haven't been shy with their opinions lately, logging 133 posts in the past 30 days. Even with a robust four out of five stars, Watts Water Technologies' CAPS rating falls a little short of the community's upbeat outlook.

Management:
Watts Water Technologies' profit has risen year-over-year by an average of 4.9% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

36.6%

34.7%

36.7%

35.6%

Operating Margin

11.1%

7.1%

6.9%

7.4%

Net Margin

6.4%

3.9%

3.4%

3.6%

For all our Watts Water Technologies-specific analysis, including earnings and beyond, add Watts Water Technologies to My Watchlist.

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