What Happened?

Shares of equipment distributor Watsco (NYSE:WSO) jumped 8.3% in the morning session after the company reported strong fourth-quarter 2024 results, which blew past analysts' sales, operating profits, and earnings estimates. Sales rose 9.4% y/y, fueled by double-digit growth in residential HVAC equipment. Zooming out, we think this was a good quarter with some key areas of upside.

Is now the time to buy Watsco? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Watsco’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Watsco is up 12.6% since the beginning of the year, and at $527.68 per share, it is trading close to its 52-week high of $568.78 from November 2024. Investors who bought $1,000 worth of Watsco’s shares 5 years ago would now be looking at an investment worth $3,094.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.