MeritValue

WATTS WATER TECHNOLOGIES INC

WTSdata completeness 100%18 fiscal years on file
The thesis, from the filings

WATTS WATER TECHNOLOGIES INC earns about 19% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $81.08 and $586.24 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.81B1$1.98B2$2.06B3$2.25B3$2.44B3
Net income$165.7M4$251.5M5$262.1M6$291.2M6$340.8M6
Operating cash flow$180.8M7$224M8$310.8M9$361.1M9$402M9
Capital expenditure$26.7M10$28.1M11$29.7M12$35.3M12$45.7M12
Free cash flow (derived)$154.1M7$195.9M8$281.1M9$325.8M9$356.3M9
Total debt$141.9M13$147.6M14$298.3M15$197M16$197.7M16
Cash & equivalents$242M17$310.8M18$350.1M19$386.9M20$405.5M20
Diluted shares33.9M33.6M33.5M33.5M33.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$605.28
your share of equity
Profit it earned you last year
$101.73
Free cash flow it threw off
$106.36
Debt you’d be carrying
$59.01

10 shares is a claim on $605.28 of net worth that earned you $101.73 and generated $106.36 of cash last year, against $59.01 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
19% avg · 5y
FY21 16%FY22 23%FY23 18%FY24 20%FY25 19%

It earned about 19% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−1% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 39% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $81.08 and $586.24 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$586.24
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$325.8M
DCF · Growth Exit 5Y
$323.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$325.8M
Earnings Power Value
$81.08
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$262.1M
  • growthAssumed0.0%
Graham Number
$117.69
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $323.29
The three cases
Bear0.0%$145.16
Base20.0%$323.29
Bull20.0%$323.29

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-24-001444 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-001102 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001104659-26-018541 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-001444 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-001102 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001104659-26-018541 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-001444 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-001102 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001104659-26-018541 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-24-001444 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-25-001102 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001104659-26-018541 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001558370-23-001614 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001558370-24-001444 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001558370-25-001102 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001104659-26-018541 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001558370-23-001614 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001558370-24-001444 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001558370-25-001102 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001104659-26-018541 (CashAndCashEquivalentsAtCarryingValue)