Waters (WAT) AI Stock Analysis

• Market Cap: $21.55B
• Dividend Yield: N/A
• Average Volume (3M): 565.92K
• Price to Earnings (P/E): 31.5
• Beta (1Y): 0.83
• Revenue Growth: 2.57%
• EPS Growth: 8.31%
• Country: US
• Employees: 7,600
• Sector: Healthcare
• Sector Strength: 44
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 2.25
• Shares Outstanding: 59,509,090
• 10 Day Avg. Volume: 533,438
• 30 Day Avg. Volume: 565,925
• PEG Ratio: 10.80
• Price to Book (P/B): 10.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.06
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 11.68
• Enterprise Value/Ebitda: 5.30
• 1Y Price Target: $395.31
• Price Target Upside: 13.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: $383.00 ▲( 10.26% Upside)

Waters Corporation's strong financial performance and positive earnings call guidance are the primary drivers of its overall score. Despite technical indicators showing mixed signals and a valuation that suggests the stock may be overvalued, the company's strategic positioning and growth in key markets provide a solid foundation for potential future performance.

Positive Factors

Acquisition Strategy

The acquisition of Halo Labs fits WAT's strategy to expand into high-growth areas like bioanalytical characterization.

Financial Flexibility

WAT is in a strong position for future mergers and acquisitions with leverage at approximately 1x, indicating financial flexibility.

Market Growth

India's market, which contributes around 9% of revenues, showed a 20% increase, validating Waters Corp's leadership in the generics market.

Negative Factors

Market Volatility

End markets continue to be volatile, with specific concerns in the Pharma sector in China, which makes up a significant part of the company's revenue there.

Premium Valuation Concerns

The analyst maintains a Neutral rating, citing the premium valuation and uncertain market fundamentals.

Tariff Impact

If the tariff situation worsens, WAT could see a larger hit and potential need to raise prices further.

Waters Business Overview & Revenue Model

Company Description

Waters Corporation is a leading global manufacturer specializing in analytical instruments, consumables, and software solutions used in scientific research, pharmaceuticals, food safety, and environmental testing. The company focuses on providing high-performance liquid chromatography (HPLC), mass spectrometry (MS), and thermal analysis innovations to help scientists and researchers optimize their laboratory work, ensuring the quality and safety of products across various industries.

How the Company Makes Money

Waters Corporation generates revenue primarily through the sale of analytical instruments and related services. Its key revenue streams include the sales of high-performance liquid chromatography (HPLC) systems and mass spectrometry (MS) instruments, which are crucial for laboratory testing and research. In addition, the company earns money by providing software solutions that complement its instruments, offering enhanced data analysis and laboratory management capabilities. Waters also has a significant revenue stream from sales of consumables and replacement parts, ensuring continuous operation of its instruments. Furthermore, the company offers service contracts and support services, which provide recurring revenue and strengthen customer relationships. Partnerships with research institutions, pharmaceutical companies, and government agencies often contribute to Waters' earnings by driving demand for its advanced laboratory solutions.

Waters Financial Statement Overview

Summary

Waters demonstrates strong financial performance with a high profitability indicated by gross and net profit margins. The balance sheet is stable with a moderate debt-to-equity ratio and impressive ROE. Cash flow metrics are robust, signifying effective capital management, though revenue growth remains flat.

Income Statement

Waters exhibits strong profitability with a gross profit margin of 62.1% and a net profit margin of 22.0% in the TTM period. The EBIT margin of 28.4% and EBITDA margin of 33.4% further highlight operational efficiency. However, revenue growth has been relatively flat in recent years, indicating a need for revitalization in growth strategies.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.78, suggesting a balanced capital structure. The equity ratio of 42.7% reflects a relatively stable financial position, though improvements can be made in leverage management. Return on Equity at 33.5% is impressive, driven by high net income relative to equity.

Cash Flow

Positive cash flow metrics are evident with a stable free cash flow to net income ratio of 0.94 and a robust operating cash flow to net income ratio of 1.15 in the TTM. Free cash flow growth is evident, albeit modest, suggesting effective capital expenditure management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.98B	2.96B	2.96B	2.97B	2.79B	2.37B
	Gross Profit
1.85B	2.21B	1.76B	1.72B	1.63B	1.36B
	EBIT
846.34M	826.35M	817.68M	873.39M	821.71M	645.49M
	EBITDA
995.26M	1.04B	1.00B	1.01B	958.42M	777.97M
	Net Income Common Stockholders
657.02M	637.83M	642.23M	707.75M	692.84M	521.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
382.87M	325.36M	395.97M	481.39M	569.28M	443.15M
	Total Assets
4.59B	4.55B	4.63B	3.28B	3.09B	2.84B
	Total Debt
1.54B	1.70B	2.44B	1.65B	1.51B	1.36B
	Net Debt
1.15B	1.38B	2.05B	1.17B	1.01B	919.82M
	Total Liabilities
1.67B	2.73B	3.48B	2.78B	2.73B	2.61B
	Stockholders Equity
1.96B	1.83B	1.15B	504.49M	367.55M	232.14M
Cash Flow		Free Cash Flow
619.24M	619.64M	442.18M	428.20M	579.01M	618.12M
	Operating Cash Flow
758.81M	762.12M	602.81M	611.66M	747.27M	790.51M
	Investing Cash Flow
-140.53M	-144.02M	-1.44B	-107.97M	-231.63M	-264.09M
	Financing Cash Flow
-577.75M	-696.67M	754.95M	-509.63M	-438.27M	-440.50M

Waters Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 347.36
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAT, the sentiment is Negative. The current price of 347.36 is below the 20-day moving average (MA) of 349.25, below the 50-day MA of 348.38, and below the 200-day MA of 361.91, indicating a neutral trend. The MACD of 2.58 indicates Negative momentum. The RSI at 49.66 is Neutral, neither overbought nor oversold. The STOCH value of 51.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAT.

Waters Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDXX	74 Outperform	$41.59B	46.28	59.33%	―	5.56%	4.66%
WAT	71 Outperform	$21.55B	31.50	40.82%	―	2.57%	8.31%
A	69 Neutral	$32.35B	26.08	20.61%	0.85%	-3.00%	3.67%
TMO	69 Neutral	$156.19B	24.28	13.73%	0.40%	0.96%	9.19%
DHR	64 Neutral	$141.54B	38.34	7.22%	0.57%	-9.19%	-12.75%
MTD	64 Neutral	$24.65B	28.27	-680.23%	―	1.18%	12.34%
Sector *	53 Neutral	$5.24B	3.07	-43.58%	2.80%	16.87%	-0.11%

Waters Corporate Events

Waters Showcases Growth Strategy at Healthcare Conference

Waters Corporation is set to present its business performance at the J.P. Morgan Healthcare Conference, highlighting its disciplined growth strategy and strong market positioning. The company emphasizes its leadership in providing high-quality analytical instruments, showcasing a robust financial performance with a $2.9 billion revenue and a 30.7% adjusted operating margin. Waters’ focus on resilient growth drivers and its balanced geographic footprint underline its strategic approach to capturing market opportunities and ensuring sustained profitability.