UK small/midcap investors like myself are loving today’s speculative bubble in AI, Space & semiconductor stocks. Since it has artificially pushed down the prices of many other quality GARP shares such as Water Intelligence . A ‘one stop shop’ for leak detection, repair and preventative maintenance solutions, operating across the US (American Leak Detection, ALD), UK, Ireland, Canada & Australia.
Better still WATR appears to have reached a major inflection point – combining top line growth with higher quality talent. Why?
Well in this morning’s positive & ‘in line’ Q1 trading update, revenues & EBITDA jumped 9% (vs 4% LY) and 8% respectively to $23.2m & $4.4m (19% margin) - despite the extremely poor weather in Jan/Feb across the US.
Similarly net debt closed Mar’26 at a comfortable $21.4m (1.35x EBITDA), whilst adjusted PBT edged up 3% to $2.52m. Moreover, April reinforced the Q1 momentum, particularly in the important US B2B channel (up 16%) - where I expect to see improved PBT operating leverage over the coming quarters.
Elsewhere, canny Exec Chairman Patrick DeSouza has quietly been refreshing his senior leadership team with astute hires such as Will Knell (CEO ALD) and Michael Moulton, the new CFO. Both appointments materially improving the bench strength of the Board.
Indeed Water Intelligence is no longer simply a leading leak detection and remediation operator. Rather over the past 2 years, it has transformed into a tech-enabled platform for monitoring, diagnosing, detecting, repairing and preventing water loss. In Q1, the group launched paid pilots with B2B customers for both StreamLabs and Bluebot wireless monitoring products, feeding live water infrastructure data into digital dashboards and its Salesforce CRM. That matters because it ties together IoT hardware, proprietary acoustic leak detection, minimally invasive repair and aftercare – creating a more valuable, stickier and scalable service for insurers, landlords and infrastructure owners.
Executive Chairman Dr Patrick DeSouza commenting: “Q1’26 financial results were much stronger than Q1’25. April reinforced this momentum.” He added that customers are increasingly looking to preventive maintenance “to reduce the cost of water and the cost of damage from water leaks.”
Finally wrt valuation, Canaccord is forecasting FY’26 revenues, EBITDA, PBT and fully diluted EPS of $99.6m (+10% yoy), $18.2m (+10%), $10.8m (+17%) and 42.8 cents (+20%) respectively. At 255p, this puts the stock on only 9.0x PER (incl 2m B shares), 4.9x EV/EBITDA, 0.9x EV/Sales and 0.5x PEG. The broker has a BUY rating and 515p price target, implying 100% upside, whilst noting potential for 900p+ longer term if the preventative maintenance strategy successfully scales.
Lastly, the ongoing conflict in the Middle East should have minimal direct impact on the group other than perhaps pushing up short term borrowing costs.
Disclosure: I own shares in Water Intelligence , who are also a Vox Markets client.