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Waters Corp. (WAT)
NYSE:WAT
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Waters
(NYSE:WAT)
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Rating:69Neutral
Price Target:
$332.00
▲(1.10% Upside)
Waters Corporation's overall stock score is driven by strong financial performance and positive earnings call sentiment. However, technical indicators and valuation concerns temper the score, reflecting potential cost pressures and overvaluation risks.
Positive Factors
Revenue Growth
Consistent sales growth indicates strong market demand and effective business strategies, supporting long-term revenue expansion.
Strategic Advancements
The strategic merger is anticipated to drive significant revenue and EPS growth, enhancing competitive positioning and market reach.
Product Innovation
Successful product launches demonstrate Waters' innovation capabilities, ensuring continued relevance and competitiveness in the market.
Negative Factors
Operating Margin Pressures
Margin pressures from external factors could limit profitability, affecting long-term financial health and investment capacity.
Reliance on Debt
High reliance on debt financing can constrain financial flexibility, posing risks to stability during economic downturns or interest rate hikes.
Challenges in Academic Segment
Declines in key segments like academic and government may hinder growth, impacting revenue diversification and sector penetration.
Waters (WAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.55B
Dividend YieldN/A
Average Volume (3M)685.31K
Price to Earnings (P/E)29.6
Beta (1Y)0.79
Revenue Growth5.89%
EPS Growth10.61%
CountryUS
Employees7,600
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)2.95
Shares Outstanding59,524,130
10 Day Avg. Volume682,425
30 Day Avg. Volume685,313
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue7.29
Enterprise Value/Gross Profit12.35
Enterprise Value/Ebitda20.99
Forecast
1Y Price Target
$358.15Price Target Upside9.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Waters Business Overview & Revenue Model
Company DescriptionWaters Corporation, a specialty measurement company, provides analytical workflow solutions in Asia, the Americas, and Europe. It operates through two segments, Waters and TA. The company designs, manufactures, sells, and services high and ultra-performance liquid chromatography, as well as mass spectrometry (MS) technology systems and support products, including chromatography columns, other consumable products, and post-warranty service plans. It also designs, manufactures, sells, and services thermal analysis, rheometry, and calorimetry instruments; and develops and supplies software-based products that interface with its instruments, as well as other manufacturers' instruments. Its MS technology instruments are used in drug discovery and development comprising clinical trial testing, the analysis of proteins in disease processes, nutritional safety analysis, and environmental testing. The company offers thermal analysis, rheometry, and calorimetry instruments for use in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals, and viscous liquids for various industrial, consumer good, and healthcare products, as well as for life science research. Its products are used by life science, pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic, and governmental customers working in research and development, quality assurance, and other laboratory applications. Waters Corporation was founded in 1958 and is headquartered in Milford, Massachusetts.
How the Company Makes MoneyWaters generates revenue through multiple streams, primarily by selling its analytical instruments, which include chromatography and mass spectrometry systems, along with the associated consumables and accessories. Additionally, the company offers software solutions that facilitate data analysis and instrument management, contributing to its income. Service contracts and maintenance agreements for its instruments also provide a steady revenue stream. Significant partnerships with research institutions, pharmaceutical companies, and regulatory agencies further bolster its earnings, as these collaborations often lead to the adoption of Waters' technologies in critical applications across various industries.
Waters Key Performance Indicators (KPIs)
Any
Total Recurring Revenue
Measures the revenue from ongoing customer subscriptions or services, indicating the stability and predictability of the company’s income stream.
Measures the revenue from ongoing customer subscriptions or services, indicating the stability and predictability of the company’s income stream.
Data provided by:
Main Street Data
Main Street DataWaters Earnings Call Summary
Earnings Call Date:Aug 04, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong sales growth, increased guidance, and successful product launches. However, there were challenges in the TA division and academic and government segments, as well as some operating margin pressures. Overall, the highlights slightly outweigh the lowlights, indicating a positive sentiment.Q2-2025 Updates
Positive Updates
Strong Sales Performance
Sales grew 9% as reported and 8% in constant currency, with instruments growing mid-single digits and recurring revenue up 11%. Waters Division performed well across Americas, Europe, and Asia.
Significant Growth in Pharma Segment
Pharma segment grew 11%, with strong instrument replacement activity and product adoption among large pharma and CDMO customers.
Increased Guidance for Fiscal Year 2025
Full year 2025 constant currency sales growth guidance raised to 5.5% to 7.5%, and non-GAAP EPS guidance increased to $12.95 to $13.05.
Expansion in High-Growth Areas
E-commerce adoption above 40% of chemistry revenue, service plan attachment increased by 200 basis points, and CDMO penetration at 27% of pharma revenue.
Successful Product Launches
Alliance iS sales grew 300% year-over-year, Xevo TQ Absolute platforms grew 40%, and MaxPeak premier columns saw over 30% growth.
Strong Performance in China
Asia grew 14%, with double-digit growth in China. Strong performance across all end markets, particularly in CDMOs and battery testing.
Negative Updates
Weakness in TA Division
The TA division experienced a 6% decline due to softness in macro-sensitive polymer and materials testing applications, particularly in the Americas and Europe.
Challenges in Academic and Government Segment
The academic and government segment declined 3%, with continued industry headwinds and no assumed funding return in the baseline for the second half of the year.
Operating Margin Pressures
Gross margin for the quarter was 58.3%, and operating margin was impacted by regional sales mix and margin dilution from tariff surcharges.
Company Guidance
During the Waters Corporation Second Quarter 2025 Financial Results Conference Call, the company provided updated guidance, reporting strong performance with sales growing 9% as reported and 8% in constant currency. Recurring revenue surged by 11%, supported by 9% growth in services and double-digit growth in chemistry. The company has raised its full-year 2025 constant currency sales growth guidance to 5.5% to 7.5% and increased its non-GAAP EPS guidance to $12.95 to $13.05. Additionally, Waters announced strategic advancements, including the expected completion of its combination with BD's Biosciences and Diagnostic Solutions business. The transaction is anticipated to drive a 7% revenue CAGR and mid-teens adjusted EPS growth, with cost synergies of $200 million by year 3 and $290 million in revenue synergies by year 5.Waters Financial Statement Overview
Summary
Waters exhibits strong profitability and effective leverage management, with consistent revenue growth and robust returns on equity. However, potential cost pressures are affecting margins, and the low equity ratio suggests reliance on debt.Income Statement
Waters has demonstrated consistent revenue growth with a TTM growth rate of 2.11%. The company maintains strong profitability with a gross profit margin of 66.16% and a net profit margin of 21.71% in the TTM period. However, there is a slight decline in gross profit margin from the previous year, indicating potential cost pressures.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.71 in the TTM period, reflecting better leverage management. Return on equity remains strong at 35.02%, showcasing effective use of equity. However, the equity ratio is relatively low, indicating a higher reliance on debt financing.65
Positive
Cash Flow
Waters shows stable cash flow generation with a free cash flow to net income ratio of 83.09% in the TTM period. The operating cash flow to net income ratio is 73.36%, indicating efficient cash conversion. Free cash flow growth is modest at 1.9%, suggesting limited expansion in cash reserves.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.05B | 2.96B | 2.96B | 2.97B | 2.79B | 2.37B |
| Gross Profit | 1.80B | 1.76B | 1.76B | 1.72B | 1.63B | 1.36B |
| EBITDA | 1.06B | 1.04B | 1.00B | 1.02B | 982.81M | 785.35M |
| Net Income | 661.39M | 637.83M | 642.23M | 707.75M | 692.84M | 521.57M |
Balance Sheet | ||||||
| Total Assets | 4.72B | 4.55B | 4.63B | 3.28B | 3.09B | 2.84B |
| Cash, Cash Equivalents and Short-Term Investments | 367.21M | 325.36M | 395.97M | 481.39M | 569.28M | 443.15M |
| Total Debt | 1.54B | 1.70B | 2.44B | 1.66B | 1.60B | 1.45B |
| Total Liabilities | 2.56B | 2.73B | 3.48B | 2.78B | 2.73B | 2.61B |
| Stockholders Equity | 2.16B | 1.83B | 1.15B | 504.49M | 367.55M | 232.14M |
Cash Flow | ||||||
| Free Cash Flow | 619.36M | 619.64M | 442.18M | 428.20M | 579.01M | 618.12M |
| Operating Cash Flow | 745.41M | 762.12M | 602.81M | 611.66M | 747.27M | 790.51M |
| Investing Cash Flow | -162.76M | -144.02M | -1.44B | -107.97M | -231.63M | -264.09M |
| Financing Cash Flow | -544.74M | -696.67M | 754.95M | -509.63M | -438.27M | -440.50M |
Waters Technical Analysis
Positive
328.39
Price Trends
296.85
Positive
318.25
Positive
344.51
Negative
Market Momentum
4.26
Negative
66.80
Neutral
89.40
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAT, the sentiment is Positive. The current price of 328.39 is above the 20-day moving average (MA) of 302.35, above the 50-day MA of 296.85, and below the 200-day MA of 344.51, indicating a neutral trend. The MACD of 4.26 indicates Negative momentum. The RSI at 66.80 is Neutral, neither overbought nor oversold. The STOCH value of 89.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WAT.
Waters Risk Analysis
Waters disclosed 2 risk factors in its most recent earnings report. Waters reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
Waters Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $40.16B | 33.21 | 19.88% | 0.70% | 4.48% | -11.52% | |
78 Outperform | $205.16B | 31.45 | 13.44% | 0.31% | 2.05% | 7.03% | |
77 Outperform | $50.50B | 52.54 | 64.87% | ― | 6.68% | 18.84% | |
69 Neutral | $19.55B | 29.60 | 37.03% | ― | 5.89% | 10.61% | |
69 Neutral | $153.94B | 45.66 | 6.68% | 0.57% | -3.24% | -16.60% | |
62 Neutral | $27.07B | 33.28 | -680.23% | ― | 3.11% | 8.50% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
WAT
Waters
328.39
-21.53
-6.15%
A
Agilent
141.64
-1.09
-0.76%
DHR
Danaher
214.99
-52.18
-19.53%
IDXX
Idexx Laboratories
631.19
158.78
33.61%
MTD
Mettler-Toledo
1,314.04
-151.21
-10.32%
TMO
Thermo Fisher
543.32
-53.42
-8.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.