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Waters Corp. (WAT)
NYSE:WAT
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Waters
(NYSE:WAT)63Neutral
Positive Factors
Revenue Growth
Large molecule improvements have led to a significant revenue increase, with potential for further market coverage and mix benefits.
Strategic Growth
M&A remains a top priority, focusing on financially smart deals, indicating a strategic approach to growth.
Negative Factors
Earnings Expectations
Shares were down likely on overextended growth and earnings expectations and WAT's premium valuation.
Waters (WAT) vs. S&P 500 (SPY)
Market Cap
$22.42B
Dividend YieldN/A
Average Volume (3M)470.91K
Price to Earnings (P/E)34.7
Beta (1Y)0.92
Revenue Growth0.07%
EPS Growth-1.20%
CountryUS
Employees7,900
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)10.71
Shares Outstanding59,410,942
10 Day Avg. Volume502,110
30 Day Avg. Volume470,907
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.58
Price to Cash Flow (P/CF)23.30
P/FCF Ratio27.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$410.08Price Target Upside11.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Waters Business Overview & Revenue Model
Company DescriptionWaters 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 MoneyWaters 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 solid financial health with strong profitability and improved balance sheet stability. The elimination of debt and consistent cash generation supports operational resilience. Though revenue growth is modest, high margins indicate a strong competitive position within the industry.Income Statement
Waters shows strong stability in revenue with a slight increase from the previous period, maintaining solid gross and net profit margins. The gross profit margin for TTM is 58.2%, and the net profit margin is 21.6%. EBIT and EBITDA margins are healthy at 28.3% and 33.3%, respectively, indicating efficient operations and profitability. Although revenue growth is marginal, the company exhibits consistent profitability, which is a positive sign.85
Very Positive
Balance Sheet
Waters has improved its financial position, notably eliminating its total debt, resulting in a debt-to-equity ratio of 0. The equity ratio stands at 40.1%, indicating a sound capital structure. The return on equity for TTM is robust at 34.9%, suggesting effective use of equity capital. Despite past high leverage, the company has taken significant steps to strengthen its balance sheet, enhancing financial stability.75
Positive
Cash Flow
The cash flow statement highlights a strong free cash flow position, with a significant growth rate of 40.1% from the previous year, indicating robust cash generation capability. The operating cash flow to net income ratio is 1.19, demonstrating good cash profitability. Waters exhibits a healthy free cash flow to net income ratio of 0.97, reinforcing its capacity to generate cash while maintaining profitability.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.96B | 2.96B | 2.97B | 2.79B | 2.37B | Gross Profit |
| 2.21B | 1.76B | 1.72B | 1.63B | 1.36B | EBIT |
| 826.35M | 817.68M | 873.39M | 821.71M | 645.49M | EBITDA |
| 1.04B | 1.00B | 1.01B | 958.42M | 777.97M | Net Income Common Stockholders |
| 637.83M | 642.23M | 707.75M | 692.84M | 521.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 325.36M | 395.97M | 481.39M | 569.28M | 443.15M | Total Assets |
| 4.55B | 4.63B | 3.28B | 3.09B | 2.84B | Total Debt |
| 1.70B | 2.44B | 1.65B | 1.51B | 1.36B | Net Debt |
| 1.38B | 2.05B | 1.17B | 1.01B | 919.82M | Total Liabilities |
| 2.73B | 3.48B | 2.78B | 2.73B | 2.61B | Stockholders Equity |
| 1.83B | 1.15B | 504.49M | 367.55M | 232.14M |
| Cash Flow | Free Cash Flow | |||
| 619.64M | 442.18M | 428.20M | 579.01M | 618.12M | Operating Cash Flow |
| 762.12M | 602.81M | 611.66M | 747.27M | 790.51M | Investing Cash Flow |
| -144.02M | -1.44B | -107.97M | -231.63M | -264.09M | Financing Cash Flow |
| -696.67M | 754.95M | -509.63M | -438.27M | -440.50M |
Waters Technical Analysis
Negative
368.05
Price Trends
388.96
Negative
377.39
Negative
350.34
Positive
Market Momentum
-6.04
Positive
39.13
Neutral
45.46
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 368.05 is below the 20-day moving average (MA) of 388.85, below the 50-day MA of 388.96, and above the 200-day MA of 350.34, indicating a neutral trend. The MACD of -6.04 indicates Positive momentum. The RSI at 39.13 is Neutral, neither overbought nor oversold. The STOCH value of 45.46 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 30 risk factors in its most recent earnings report. Waters reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Waters Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $194.88B | 31.23 | 12.78% | 0.30% | 0.05% | 6.87% | |
68 Neutral | $35.08B | 28.28 | 20.89% | 0.76% | -3.00% | 3.67% | |
68 Neutral | $26.62B | 31.31 | -680.23% | ― | 2.22% | 12.78% | |
65 Neutral | $147.01B | 38.89 | 7.87% | 0.53% | -13.50% | -17.25% | |
63 Neutral | $22.42B | 34.70 | 34.88% | ― | 0.07% | -1.20% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
48 Neutral | $7.11B | ― | -28.07% | ― | -3.92% | -202.80% |
* Healthcare Sector Average
Performance Comparison
WAT
Waters
368.05
19.05
5.46%
A
Agilent
123.06
-22.15
-15.25%
BIO
Bio-Rad Laboratories
250.50
-82.75
-24.83%
DHR
Danaher
205.91
-45.90
-18.23%
MTD
Mettler-Toledo
1,240.97
-70.68
-5.39%
TMO
Thermo Fisher
516.57
-73.32
-12.43%
Waters Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -9.19% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in Q4 with significant growth driven by new products and strong segments like Pharma and Academic. However, notable challenges remain, particularly regarding foreign exchange impacts and flat year-over-year sales. The outlook for 2025 is cautiously optimistic, backed by strong fundamentals and market recovery expectations.Highlights
Strong Fourth Quarter Performance
Achieved high single-digit constant currency revenue growth of 8% and low teens adjusted EPS growth of 13% in Q4 2024. Non-GAAP EPS was $4.10, reflecting a 13% growth, and adjusted EPS grew 22% excluding FX impact.
Pharma and Academic Segments Lead Growth
Pharma sales grew 10% in Q4, with strong growth in Europe and Asia. Academic and Government segment grew 16%, driven by 35% growth in Asia and 20% growth in Europe.
New Product Success
Alliance iS constituted 20% of HPLC revenue in Q4, and Xevo TQ Absolute system unit sales grew 40% year-over-year, constituting 50% of tandem quad revenue.
PFAS Testing Market Leadership
PFAS revenue grew over 40% in Q4 and for the year, outpacing the market, which is estimated to grow at 20% annually.
Strong Full-Year Financials
Full-year non-GAAP EPS was $11.86, reflecting 1% growth despite a 5% decline due to FX. Recurring revenue grew 6% for the year.
Growth in Europe and India
Europe grew 11% in Q4, and India maintained high growth with over 25% for the year, contributing 70 to 100 basis points to overall growth.
Lowlights
Foreign Exchange Impact
U.S. dollar strengthening posed a significant FX headwind, affecting EPS by $0.23 greater than anticipated in Q4 and expected to impact 2025 earnings by approximately 4%.
Flat Full Year Sales
Full year sales were flat both as reported and in organic constant currency terms, with instruments declining 7% overall for the year.
China Market Uncertainty
Sales in China returned to low single-digit growth in Q4, with modest contributions from stimulus expected in 2025. The long-term outlook remains uncertain.
Company Guidance
In its recent earnings call, Waters Corporation provided guidance for the upcoming fiscal year, projecting 2025 constant currency sales growth of 4.5% to 7%, with a reported sales growth range of 2.5% to 5% due to anticipated foreign exchange headwinds. Instrument sales are expected to grow at approximately 4% to 4.5%, driven by a recovery in customer capital expenditure and a revitalized product portfolio. The company also forecasts non-GAAP earnings per fully diluted share to be between $12.70 and $13, representing a 7% to 10% growth, despite a projected 4% negative impact from foreign exchange. Recurring revenues, contributing steadily with a 6% to 7% growth rate, support the overall optimistic outlook. Waters' guidance is underpinned by strong momentum in its pharmaceutical segment, robust service attachment rates exceeding 50%, and significant opportunities in emerging markets like India, where the company expects 70 to 100 basis points of growth contribution.Waters Corporate Events
Business Operations and StrategyFinancial Disclosures
Waters Showcases Growth Strategy at Healthcare Conference
Positive
Jan 13, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.