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Waterdrop
(NYSE:WDH)
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Rating:73Outperform
Price Target:
$1.00
▲(1.01% Upside)
Action:Reiterated
Date:09/08/26
The score is driven primarily by strong financial performance (notably the very low-leverage balance sheet and improving profitability) and highly attractive valuation (very low P/E and high dividend yield). These positives are tempered by weak technical trends (below key moving averages with negative MACD) and earnings-call risks around rising operating and marketing expenses alongside a YoY net profit decline.
Positive Factors
Rapid revenue and profit growth
Strong growth across total and insurance-related revenue indicates expanding customer activity and effective platform monetization. Sustained profitability through this expansion suggests Waterdrop is scaling its distribution model while retaining the ability to convert growth into operating earnings.
Negative Factors
Expense growth is pressuring earnings quality
Costs growing faster than revenue can limit operating leverage and make future profitability increasingly dependent on efficient customer acquisition. The sharp increase in marketing investment is particularly important because sustained returns will be needed for spending to translate into recurring policies and durable insurance earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Rapid revenue and profit growth
Strong growth across total and insurance-related revenue indicates expanding customer activity and effective platform monetization. Sustained profitability through this expansion suggests Waterdrop is scaling its distribution model while retaining the ability to convert growth into operating earnings.
Read all positive factors
Waterdrop Key Performance Indicators (KPIs)
Any
Operating Income by Segment
How profitable each segment is after core operating costs, showing which parts of the business actually contribute to earnings versus which are loss-making or still being invested in. Helps investors assess margin strength, capital allocation choices, and whether the company can convert revenue growth into durable profits and cash flow.
How profitable each segment is after core operating costs, showing which parts of the business actually contribute to earnings versus which are loss-making or still being invested in. Helps investors assess margin strength, capital allocation choices, and whether the company can convert revenue growth into durable profits and cash flow.
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The Fly
The FlyWaterdrop (WDH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$368.10M
Dividend Yield5.88%
Average Volume (3M)244.78K
Price to Earnings (P/E)0.9
Beta (1Y)0.93
Revenue Growth61.37%
EPS Growth44.39%
CountryUS
Employees3,018
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)7.93
Shares Outstanding279,111,450
10 Day Avg. Volume328,335
30 Day Avg. Volume244,781
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.09
Price to Sales (P/S)0.12
P/FCF Ratio2.24
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.6
Revenue Forecast (FY)$5.59B
Waterdrop Business Overview & Revenue Model
Company Description
Waterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People’s Republic of China. The company offers short-term ...
How the Company Makes Money
Waterdrop primarily makes money through insurance distribution revenue earned by facilitating the sale of insurance products from third-party insurance companies to end customers. Its core revenue stream is commissions and service fees associated ...
Waterdrop Earnings Call Summary
Earnings Call Date:Sep 08, 2026
(Q2-2026)
| Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call was predominantly positive, marked by 72.8% revenue growth, 80.5% insurance revenue growth, higher operating profit, sustained profitability, strong clinical-trial enrollment, expanding AI-driven contributions, ample cash reserves, and new shareholder-return programs. Offsetting factors included a 10.3% year-over-year decline in net profit, significant increases in operating and marketing expenses, higher R&D and credit-loss costs, and the limited current financial contribution from new global AI initiatives.Positive Updates
Strong Revenue Growth and Sustained Profitability
Second-quarter net operating revenue reached RMB1.448 billion, up 72.8% year over year. Net profit attributable to ordinary shareholders was approximately RMB126 million, and the company maintained profitability for 10 consecutive quarters.
Negative Updates
Net Profit Declined Year Over Year
Net profit attributable to shareholders was approximately RMB126 million, down 10.3% year over year, although it increased 27.9% quarter over quarter. Management attributed the year-over-year decline to tax-related items and nonrecurring gains and losses.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth and Sustained Profitability
Second-quarter net operating revenue reached RMB1.448 billion, up 72.8% year over year. Net profit attributable to ordinary shareholders was approximately RMB126 million, and the company maintained profitability for 10 consecutive quarters.
Read all positive updates
Company Guidance
For full year of 2026, Waterdrop targets more than 40% year over year growth in total revenue and over 10% of growth in operating profit; for the second half of 26 and the full year of 27, it expects to maintain an active user acquisition pace, while user value from the current period acquisition will be gradually realized through renewals and up cells and cross-sells over the sequential user life cycle. As AI usage scales, spend will grow naturally, but the company expects to keep the overall R&D ratio to a reasonable range, and its portable AI office assistant remains in the early stage with financial impact limited for now.Waterdrop Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.44B | 3.87B | 2.77B | 2.63B | 2.80B | 3.21B |
| Gross Profit | 2.40B | 1.98B | 1.46B | 1.04B | 1.47B | 1.86B |
| EBITDA | 373.28M | 374.67M | 191.71M | 6.81M | 500.96M | -1.84B |
| Net Income | 556.28M | 553.44M | 367.51M | 167.22M | 607.72M | -1.57B |
Balance Sheet | ||||||
| Total Assets | 7.73B | 7.11B | 6.45B | 6.15B | 5.92B | 5.25B |
| Cash, Cash Equivalents and Short-Term Investments | 1.82B | 1.66B | 2.60B | 3.39B | 3.70B | 2.79B |
| Total Debt | 294.35M | 70.57M | 243.92M | 197.76M | 14.05M | 58.59M |
| Total Liabilities | 2.53B | 1.95B | 1.58B | 1.47B | 1.16B | 1.28B |
| Stockholders Equity | 5.10B | 5.16B | 4.80B | 4.59B | 4.77B | 3.97B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 214.29M | 218.84M | 392.99M | 753.82M | -1.13B |
| Operating Cash Flow | 0.00 | 243.92M | 437.25M | 406.52M | 765.71M | -1.10B |
| Investing Cash Flow | 0.00 | -224.74M | 291.64M | -1.17B | -139.82M | -846.90M |
| Financing Cash Flow | 0.00 | -373.93M | -198.58M | -377.24M | -57.46M | 2.12B |
Waterdrop Technical Analysis
Neutral
0.99
Price Trends
1.08
Negative
1.30
Negative
1.52
Negative
Market Momentum
-0.03
Negative
46.96
Neutral
33.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDH, the sentiment is Neutral. The current price of 0.99 is below the 20-day moving average (MA) of 0.99, below the 50-day MA of 1.08, and below the 200-day MA of 1.52, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 46.96 is Neutral, neither overbought nor oversold. The STOCH value of 33.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WDH.
Waterdrop Risk Analysis
Waterdrop disclosed 104 risk factors in its most recent earnings report. Waterdrop reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We have made investments in generative AI and may face uncertainties with respect to its commercialization and the evolving laws and regulations applicable to us. Q4, 2023
2.
We may be materially adversely affected by the changes and evolvement in the regulation of medical crowdfunding business. Q4, 2023
3.
The legal system in mainland China is evolving, which leads to uncertainties that could adversely affect us. Q4, 2023
Waterdrop Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.15B | 10.86 | 15.95% | 5.18% | -1.66% | ― | |
79 Outperform | $632.22M | 0.30 | 44.10% | 8.39% | ― | ― | |
73 Outperform | $368.10M | 0.86 | 10.94% | 5.88% | 61.37% | 44.39% | |
69 Neutral | $2.32B | 45.60 | -32.52% | 5.56% | 17.74% | 18.77% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
47 Neutral | $42.70M | -0.26 | -90.21% | ― | -147.47% | -174.71% |
* Financial Sector Average
WDH
Waterdrop
1.02
-0.83
-44.84%
FGNX
Fundamental Global
8.38
-26.37
-75.88%
IGIC
International General Insurance Holdings
27.04
4.39
19.40%
GSHD
GooseHead Insurance
65.21
-19.17
-22.72%
YB
Yuanbao, Inc. Unsponsored ADR
13.72
-7.89
-36.51%
Waterdrop Corporate Events
Waterdrop Posts Surging Q2 2026 Results and Boosts Shareholder Payouts
Sep 8, 2026
Waterdrop reported unaudited financial results for the quarter and half-year ended June 30, 2026, showing sharp top-line and earnings momentum driven mainly by its insurance and technical service operations. Net operating revenue for the second qu...
Waterdrop Announces Finance Chief Resignation Effective July 31, 2026
Jul 24, 2026
As disclosed in a July 2026 regulatory filing, Waterdrop announced that Ms. Xiaoying Xu has resigned as vice president of finance and head of finance, effective July 31, 2026, citing personal reasons. The company emphasized that her departure does...
Waterdrop Names New Independent Director and Audit Chair as Board Reshuffles
Jun 23, 2026
Waterdrop Inc. announced on June 23, 2026, that it has appointed Ms. Qianfei Chang as an independent director effective July 1, 2026, where she will also serve as chair of the audit committee and sit on both the compensation and nominating and cor...
Waterdrop Posts Strong Q1 2026 Growth as AI Investments and Share Buybacks Accelerate
Jun 17, 2026
On June 16, 2026, Waterdrop reported unaudited results for the quarter ended March 31, 2026, highlighted by a 64.8% year-over-year jump in net operating revenue to RMB1,242.2 million and a 74.1% surge in insurance-related income to RMB1,145.8 mill...
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.