Due to global warming and crumbling infrastructure, water is becoming an increasingly scarce and valuable resource. However what’s even rarer for investors is finding a materially undervalued platform stock that is expanding rapidly and trades on attractive EV/EBITDA, PE and PEG ratios of only 5.4x 9.7x and 0.9x. In contrast, these type of high quality businesses typically go for much higher multiples.
Enter Water Intelligence , a ‘one stop shop’ for all things water leak detection, repair, wireless monitoring and preventative maintenance - operating in the US (2/3rds franchised), UK, Ireland, Canada and Australia.
Today the company said that the strong momentum witnessed in Q2’25 had continued into H2, with Q3 sales, EBITDA and PBT impressively climbing to $24.3m (+10.7% YoY), $4.7m (+52.6%) and $2.8m (+68.2%) respectively. Driven by value accretive acquisitions, new services (preventative maintenance) & products, cross-fertilisation of best practice (re rollout of Dallas template) and robust international demand (eg Australian bounce back & UK sewer blockage detection systems).
But that’s not all.
Net debt closed Sept’25 at a comfortable 1.1x LTM EBITDA, or $23.2m – even after absorbing further stock buybacks, platform investments, service engineer training and M&A (eg franchise in Middle Georgia).
Moreover going forward, (WATR ) is primed to deliver double digit top & bottom line growth (see below forecasts) underpinned by not only its best-in-class tech solutions that save water, minimize sewage spills, cut the cost of insurance bills and reduce regulatory fines. But also from mopping up smaller rivals and franchisees, who may lack critical mass, expertise, resources and national coverage.
Executive Chairman, Patrick DeSouza commenting: “We had a strong Q3 in terms of both revenue and profits which builds upon the momentum from Q2. This is just the beginning, as product partnerships for the smart home, such as StreamLabs which we are now launching across the American Leak Detection network after six months of training, will supplement both our current established base of revenue and our outlook for 2026. The Group continues to be in-line with market expectations for 2025 and is increasingly confident about expectations for 2026.”
Finally wrt valuation, house brokers Canaccord Genuity - Global Capital Markets and Shore Capital Markets have 12 month price targets of 500p & 850p per share - implying substantial value for an economically resilient, tech-enabled platform stock.
Disclosure: I own shares in Water Intelligence, who are also a Vox Markets client.