Waters (WAT) AI Stock Analysis

• Market Cap: $17.65B
• Dividend Yield: N/A
• Average Volume (3M): 828.63K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.79
• Revenue Growth: 5.89%
• EPS Growth: 10.61%
• Country: US
• Employees: 7,600
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 2.95
• Shares Outstanding: 59,524,130
• 10 Day Avg. Volume: 567,541
• 30 Day Avg. Volume: 828,628
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 7.29
• Enterprise Value/Gross Profit: 12.35
• Enterprise Value/Ebitda: 20.99
• 1Y Price Target: $358.29
• Price Target Upside: 23.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 70 Outperform
• Price Target: $329.00 ▲(13.42% Upside)

Waters Corporation's overall stock score is driven by strong financial performance and strategic corporate events, such as the merger with BD's Biosciences. While technical indicators suggest a bearish trend, the positive earnings call and valuation metrics provide a balanced outlook.

Positive Factors

Financial Guidance

Waters Corp raised its financial guidance for the fiscal year, indicating confidence in future performance.

Revenue Growth

Strong recurring revenue growth was driven by increases in the Chemistry and Service sectors, which exceeded expectations.

Negative Factors

Geographical Performance

Partial weakness in the quarter came from TA down 6% overall and down ~20% in North America, primarily due to CapEx pullbacks among autos and advanced polymers/materials customers.

Profitability

Gross margins were down compared to the previous year, indicating some pressure on profitability.

Waters Business Overview & Revenue Model

Company Description

Waters Corporation (WAT) is a leading manufacturer of analytical instruments and software, primarily serving the life sciences, food, and environmental sectors. The company specializes in the development of chromatography systems, mass spectrometry instruments, and related consumables, providing solutions for chemical analysis and quality control. With a strong focus on innovation, Waters aims to enhance laboratory productivity and accuracy through its advanced technologies and comprehensive service offerings.

How the Company Makes Money

Waters 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 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.

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.

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.

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 Price: 290.06
• 50DMA: Negative
• 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 290.06 is below the 20-day moving average (MA) of 291.79, below the 50-day MA of 307.65, and below the 200-day MA of 352.84, indicating a bearish trend. The MACD of -1.75 indicates Negative momentum. The RSI at 44.22 is Neutral, neither overbought nor oversold. The STOCH value of 43.80 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
A	79 Outperform	$35.50B	29.36	19.88%	0.78%	4.48%	-11.52%
TMO	78 Outperform	$186.06B	28.22	13.44%	0.34%	2.05%	7.03%
IDXX	77 Outperform	$51.77B	53.22	64.87%	―	6.68%	18.84%
WAT	70 Outperform	$17.65B	26.15	37.03%	―	5.89%	10.61%
DHR	69 Neutral	$147.38B	43.28	6.68%	0.59%	-3.24%	-16.60%
MTD	69 Neutral	$26.80B	32.32	-680.23%	―	3.11%	8.50%
Sector *	51 Neutral	$7.90B	-0.33	-41.69%	2.23%	23.45%	-1.99%

Waters Corporate Events

Waters Announces Reverse Morris Trust Agreement

On July 13, 2025, Waters Corporation announced a definitive agreement with Becton, Dickinson and Company (BD) and its subsidiary SpinCo for a Reverse Morris Trust transaction. This strategic move involves the reorganization and spin-off of BD’s Biosciences and Diagnostic Solutions business, followed by a merger with Waters, making SpinCo a wholly-owned subsidiary of Waters. The transaction, unanimously approved by both companies’ boards, will result in Waters shareholders owning approximately 60.8% and former SpinCo shareholders owning about 39.2% of Waters’ common stock. This merger is expected to enhance Waters’ industry positioning by expanding its capabilities in the biosciences sector.

Waters Announces $17.5B Merger with BD’s Biosciences

On July 14, 2025, Waters Corporation announced a definitive agreement to merge with BD’s Biosciences and Diagnostics Solutions business, creating a life science and diagnostics leader. The transaction, valued at approximately $17.5 billion, is expected to double Waters’ total addressable market to $40 billion and generate significant synergies, including $345 million in annualized EBITDA synergies by 2030. The merger aims to enhance market access, improve service support, and drive growth in high-growth adjacencies, with an anticipated pro forma revenue of $6.5 billion in 2025.

Waters Corporation Amends Credit Agreement for Flexibility

On May 22, 2025, Waters Corporation amended its existing credit agreement, removing a $200 million term loan facility while retaining a $1.8 billion senior unsecured revolving credit facility, which matures in 2030. This strategic financial restructuring allows Waters Corporation to maintain flexibility for general corporate purposes, including debt repayment and acquisitions, and positions the company to manage its leverage ratio effectively, ensuring compliance with financial covenants and enhancing its operational capabilities.