Waters (WAT) AI Stock Analysis

• Market Cap: $32.01B
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.70
• Revenue Growth: 6.90%
• EPS Growth: 3.86%
• Country: US
• Employees: 7,600
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 4.53
• Shares Outstanding: 98,101,870
• 10 Day Avg. Volume: 2,078,910
• 30 Day Avg. Volume: 1,126,718
• PEG Ratio: 75.62
• Price to Book (P/B): 8.83
• Price to Sales (P/S): 7.14
• P/FCF Ratio: 41.87
• Enterprise Value/Market Cap: 0.62
• Enterprise Value/Revenue: 6.27
• Enterprise Value/Gross Profit: 10.64
• Enterprise Value/Ebitda: 19.36
• 1Y Price Target: $397.38
• Price Target Upside: 24.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $359.00 ▲(12.38% Upside)
• Action: Downgraded Date: 02/12/26
• Date: Action: Downgraded 02/12/26

The score is driven primarily by strong underlying profitability and cash generation, plus a constructive 2026 outlook and synergy plan from the BD combination. These positives are tempered by very weak near-term technicals (below key moving averages with negative momentum) and a premium valuation (P/E ~30.5), with added integration and leverage risks flagged in guidance.

Positive Factors

High profitability

Sustained high gross and net margins indicate durable pricing power and efficient cost structure across instruments, consumables and services. This supports recurring cash generation and reinvestment capacity, underpinning long-term R&D funding, margins and shareholder returns over the next 2–6 months.

Recurring revenue base

Growing services and consumables create a sticky, higher‑margin revenue stream (service attach up, e‑commerce penetration ~45%). This recurring mix smooths cyclicality from instrument cycles, enhances margin durability and provides predictable cash flow for operations and integration needs.

Product innovation & LC‑MS momentum

Repeated new‑product wins and strong LC‑MS traction demonstrate sustainable competitive advantage in instrument performance and chemistry. Consistent product-led growth supports replacement cycles, increases consumables attach and secures market share over the medium term.

Negative Factors

Modest organic top‑line growth

Despite margin strength, trailing revenue growth has been muted, limiting operating leverage upside. Slower organic growth raises reliance on cycle recovery, consumables expansion and M&A synergies to meet medium‑term targets, increasing execution dependence over 2–6 months.

Elevated post‑deal leverage

The BD combination materially increases pro forma leverage and interest expense, constraining financial flexibility. Deleveraging targets require consistent cash flow and realized synergies; any integration delays or weaker FCF could slow the planned path to sub‑2x leverage.

Exposure to cyclical/regional headwinds

Significant exposure to diagnostics seasonality and regional demand (China A&G, POC timing) increases revenue volatility. Near‑term weakness in TA and government/academic markets highlights sensitivity to macro and seasonal swings that can pressure instrument replacement and consumables demand.

Waters Business Overview & Revenue Model

Company Description

Waters 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 Money

Waters generates revenue primarily through the sale of its analytical instruments, consumables, and software solutions. Key revenue streams include the sale of mass spectrometers and chromatographic systems, which are critical for various applications in pharmaceuticals, environmental testing, and food safety. Additionally, Waters earns revenue from ongoing services and support, including maintenance contracts and training for its products. The company has established significant partnerships with research institutions and pharmaceutical companies, enhancing its market presence and driving sales through collaborative product development and innovative applications. Furthermore, Waters benefits from a strong focus on research and development, allowing it to introduce new technologies that meet the evolving needs of its customers, thereby contributing to its financial growth.

Waters Financial Statement Overview

Summary

Strong profitability and cash conversion support a high-quality earnings profile (TTM gross margin ~59%, net margin ~20%; FCF ~83% of net income). Offsetting this, recent revenue growth is modest (TTM ~1.9%) and cash flow has shown some variability (TTM FCF ~-10%). Balance sheet trends look improved in the latest period (TTM shows zero debt), but historical leverage swings add some caution.

Income Statement

Profitability is a clear strength: TTM (Trailing-Twelve-Months) gross margin is ~59% and net margin is ~20%, indicating strong pricing power and disciplined cost structure. Revenue growth has been modest recently (TTM ~1.9% after essentially flat 2024 and slight decline in 2023), which tempers the outlook versus earlier, stronger growth years. Overall, earnings power is high and fairly consistent, but the growth trajectory has cooled.

Balance Sheet

Leverage and equity trends are mixed. The annual reports show meaningful debt and historically elevated debt-to-equity (peaking above 6x in 2020 and improving to ~0.93x in 2024), suggesting balance-sheet risk has been coming down. TTM (Trailing-Twelve-Months) shows zero total debt and a higher equity base, which—if sustained—would be a major improvement in financial flexibility. Returns on equity are strong across periods, but the sharp shifts in leverage/equity levels point to potential volatility in capital structure.

Cash Flow

Cash generation is solid: TTM (Trailing-Twelve-Months) operating cash flow (~$653M) and free cash flow (~$540M) are healthy, and free cash flow is consistently a large share of net income (TTM ~83%). The main weakness is variability—TTM free cash flow declined (~-10%), and prior years show uneven free-cash-flow growth—so cash conversion is good, but not steadily improving.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.17B	2.96B	2.96B	2.97B	2.79B
Gross Profit	1.83B	1.76B	1.76B	1.72B	1.63B
EBITDA	1.01B	1.04B	1.00B	1.02B	982.81M
Net Income	642.63M	637.83M	642.23M	707.75M	692.84M
Balance Sheet
Total Assets	5.08B	4.55B	4.63B	3.28B	3.09B
Cash, Cash Equivalents and Short-Term Investments	587.83M	325.36M	395.97M	481.39M	569.28M
Total Debt	1.41B	1.70B	2.44B	1.66B	1.60B
Total Liabilities	2.52B	2.73B	3.48B	2.78B	2.73B
Stockholders Equity	2.56B	1.83B	1.15B	504.49M	367.55M
Cash Flow
Free Cash Flow	539.81M	619.64M	442.18M	428.20M	579.01M
Operating Cash Flow	652.55M	762.12M	602.81M	611.66M	747.27M
Investing Cash Flow	-152.25M	-144.02M	-1.44B	-107.97M	-231.63M
Financing Cash Flow	-237.21M	-696.67M	754.95M	-509.63M	-438.27M

Waters Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 319.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 319.44 is below the 20-day moving average (MA) of 350.72, below the 50-day MA of 373.44, and below the 200-day MA of 343.89, indicating a bearish trend. The MACD of -15.91 indicates Positive momentum. The RSI at 32.45 is Neutral, neither overbought nor oversold. The STOCH value of 68.07 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	73 Outperform	$35.19B	27.21	20.62%	0.72%	6.73%	3.34%
IDXX	70 Outperform	$51.69B	50.26	66.20%	―	8.39%	21.44%
WAT	69 Neutral	$32.01B	29.67	29.28%	―	6.90%	3.86%
DHR	67 Neutral	$147.76B	41.45	7.05%	0.53%	2.90%	-4.81%
MTD	66 Neutral	$28.04B	32.76	―	―	4.77%	7.93%
TMO	61 Neutral	$193.72B	29.06	13.04%	0.30%	3.91%	7.09%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Waters Corporate Events

Waters Closes Reverse Morris Trust, Forms Expanded Life Sciences Leader

On February 9, 2026, Waters completed its previously announced Reverse Morris Trust combination with BD’s Biosciences & Diagnostic Solutions businesses, creating a larger life sciences and diagnostics group with Waters shareholders owning 60.8% and BD shareholders 39.2% of the combined company. The deal, financed in part through a $4.0 billion SpinCo term loan guaranteed by Waters and its key subsidiaries, is designed to strengthen the company’s position in high-volume, regulated testing markets and expand into high-growth adjacent segments.

Following the closing, Waters reorganized into four divisions—Analytical Sciences, Biosciences, Advanced Diagnostics, and Materials Sciences—aligning product lines from chromatography and mass spectrometry to flow cytometry and specialty diagnostics under a unified structure. In parallel, the company put in place tax, employee, intellectual property and transition service agreements with BD and SpinCo, while adding genomics expert Claire M. Fraser to its expanded 11-member board to help oversee integration and future growth.

The most recent analyst rating on (WAT) stock is a Buy with a $440.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

Waters shareholders approve transformative BD business combination

On January 27, 2026, Waters shareholders overwhelmingly approved the issuance of Waters common stock to shareholders of Becton, Dickinson and Company in connection with the planned combination of BD’s Biosciences & Diagnostic Solutions business with Waters, with approximately 90.8% of eligible shares represented at the special meeting and about 99% of those present voting in favor. With all required regulatory approvals secured and a favorable IRS private letter ruling obtained on U.S. federal income tax matters related to the deal, the companies expect to close the transaction on February 9, 2026, positioning Waters as a more differentiated leader in life sciences and diagnostics and prompting the company to align the release of its Q4 2025 financial results and conference call with the anticipated closing date.

The most recent analyst rating on (WAT) stock is a Buy with a $460.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

Waters Issues Supplemental Disclosures to Keep Merger on Track

On July 13, 2025, Waters Corporation signed definitive agreements with Becton, Dickinson and Company to execute a Reverse Morris Trust transaction under which BD will spin off its Biosciences and Diagnostic Solutions business into Augusta SpinCo Corporation and, following a pro rata distribution of SpinCo shares to BD shareholders, SpinCo will merge with a Waters subsidiary to become a wholly owned unit of Waters in exchange for Waters stock. In the run-up to a January 27, 2026 special meeting of Waters shareholders and after the SEC declared Waters’ Form S‑4 registration statement effective on December 23, 2025, Waters faced two shareholder lawsuits and several demand letters alleging that its proxy statement/prospectus omitted material information; while maintaining that its disclosures fully comply with the law and denying any wrongdoing, the company has issued detailed supplemental disclosures, including additional background on transaction negotiations, financial projections and valuation analyses, in an effort to moot the claims, avoid litigation-related delays and keep the planned merger on track.

The most recent analyst rating on (WAT) stock is a Buy with a $456.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

Waters Highlights Investor Update and Spin-Off Transaction Progress

Waters Corporation plans to present an investor presentation at the J.P. Morgan Healthcare Conference on January 12, 2026, where President and CEO Udit Batra will provide high-level commentary on the company’s business performance, with a transcript to be made available on its website afterward. The company also detailed the progress of its proposed transaction with Becton, Dickinson and Company and Augusta SpinCo Corporation, noting that the SEC declared effective Waters’ Form S-4 registration statement and SpinCo’s Form 10 on December 23 and December 31, 2025, respectively, and that a definitive proxy statement/prospectus was mailed to Waters shareholders of record as of December 19, 2025, signaling an advanced stage in the regulatory and shareholder communication process for the deal.

The most recent analyst rating on (WAT) stock is a Hold with a $400.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.