Watts Water Technologies, Inc. (NYSE: WTS), a leading provider of water solutions, experienced a significant surge in its stock price on Tuesday, rising 5.39% in pre-market trading. The company's share price movement can be attributed to positive expectations surrounding its upcoming first-quarter financial performance.
According to the company's guidance, Watts Water anticipates its adjusted EBITDA margin for the first quarter to be between 19.4% and 20%, reflecting a decrease of 60 to 120 basis points compared to the prior year. Similarly, the adjusted operating margin is projected to range from 16.9% to 17.5%, representing a decline of 70 to 130 basis points.
Despite the expected margin compression, the company's revenue is forecasted to grow between -3% and 7% year-over-year. While the guidance implies some challenges, investors appear to be focused on the potential for continued revenue growth, driving the stock's upward trajectory.
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