Waters (WAT) AI Stock Analysis

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Waters

(NYSE:WAT)

Select Model

Neutral 69 (OpenAI - 4o)

Rating:69Neutral

Price Target:

$332.00

▲(13.45% Upside)

Waters Corporation's overall stock score is driven by strong financial performance and a positive earnings call, highlighting robust sales growth and strategic advancements. However, valuation concerns and technical indicators suggest caution, balancing the positive outlook with potential risks.

Positive Factors

Revenue Growth

Consistent sales growth indicates strong market demand and effective sales strategies, enhancing long-term revenue stability.

Strategic Advancements

This strategic move is anticipated to drive revenue CAGR of 7% and mid-teens EPS growth, strengthening competitive positioning.

Product Innovation

Innovative product launches like Alliance iS and Xevo TQ Absolute platforms enhance market competitiveness and drive future growth.

Negative Factors

Operating Margin Pressures

Margin pressures from regional sales mix and tariffs could limit profitability, affecting long-term financial performance.

Reliance on Debt Financing

High reliance on debt could constrain financial flexibility, posing risks if market conditions deteriorate.

Weakness in TA Division

Decline in TA division highlights vulnerability to macroeconomic factors, potentially impacting segment performance.

Waters (WAT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$18.00B

Dividend YieldN/A

Average Volume (3M)662.50K

Price to Earnings (P/E)27.0

Beta (1Y)0.76

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. Volume831,983

30 Day Avg. Volume662,501

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 Cap1.23

Enterprise Value/Revenue7.29

Enterprise Value/Gross Profit12.35

Enterprise Value/Ebitda20.99

Forecast

1Y Price Target

$358.15

Price Target Upside22.38% 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

Total Recurring Revenue
Measures the revenue from ongoing customer subscriptions or services, indicating the stability and predictability of the company’s income stream.

Chart InsightsWaters' Total Recurring Revenue shows a notable upward trend, driven by strong growth in services and chemistry, as highlighted in the latest earnings call. The 11% surge in recurring revenue aligns with strategic expansions and successful product launches. Despite challenges in the TA division and academic segments, the company's increased guidance and strategic combination with BD's Biosciences and Diagnostic Solutions business indicate a robust outlook, with expected synergies and continued growth momentum.

Data provided by:

Main Street Data

Waters 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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

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

Technical Analysis Sentiment

Negative

Last Price292.65

Price Trends

50DMA

294.81

Negative

100DMA

321.31

Negative

200DMA

347.29

Negative

Market Momentum

MACD

0.22

Positive

RSI

44.61

Neutral

STOCH

31.74

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 292.65 is below the 20-day moving average (MA) of 299.74, below the 50-day MA of 294.81, and below the 200-day MA of 347.29, indicating a bearish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 44.61 is Neutral, neither overbought nor oversold. The STOCH value of 31.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
A	79 Outperform	35.26B	29.53	19.15%	0.79%	4.48%	-11.52%
IDXX	77 Outperform	50.18B	52.20	67.56%	―	6.68%	18.84%
TMO	72 Outperform	176.72B	27.19	13.03%	0.36%	2.05%	7.03%
WAT	69 Neutral	$18.00B	26.97	37.03%	―	5.89%	10.61%
DHR	69 Neutral	133.12B	40.30	6.52%	0.63%	-3.24%	-16.60%
MTD	60 Neutral	25.59B	31.47	-320.62%	―	3.11%	8.50%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

* Healthcare Sector Average

Performance Comparison

WAT

Waters

292.65

-64.68

-18.10%

Agilent

124.38

-22.55

-15.35%

DHR

Danaher

185.91

-88.35

-32.21%

IDXX

Idexx Laboratories

627.17

115.39

22.55%

MTD

Mettler-Toledo

1,242.28

-236.64

-16.00%

TMO

Thermo Fisher

468.00

-144.26

-23.56%

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.Date of analysis: Sep 20, 2025