A common misconception is that the stucco itself is waterproof and will prevent any water from getting to the wood underneath. This is very far from the truth. Stucco is a porous material and is engineered to accept and expel water.
The waterproofing element for stucco work takes places during the first steps of stucco installation. Therefore, the first steps in the stucco process include waterproofing and lath.
Waterproofing is the process in which the studs or shear wall are wrapped with an asphalt coated waterproofing paper. The waterproofing paper, typically 60-minute paper, is installed in an overlapping fashion to create a natural flow for any water that comes in contact with it.
The lath process includes the stapling, or nailing, of a wire mesh (like chicken wire) on top of the 60-minute paper, into the studs. Any area where a nail or staple penetrates the paper is caulked using an exterior grade sealant (caulking). The lath wire is installed so the scratch coat (first coat in stucco) has something to grab onto.