Waters (WAT) AI Stock Analysis

• Market Cap: $17.77B
• Dividend Yield: N/A
• Average Volume (3M): 799.21K
• Price to Earnings (P/E): 27.1
• Beta (1Y): 0.79
• Revenue Growth: 2.57%
• EPS Growth: 8.31%
• Country: US
• Employees: 7,600
• Sector: Healthcare
• Sector Strength: 37
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 2.25
• Shares Outstanding: 59,523,357
• 10 Day Avg. Volume: 1,509,864
• 30 Day Avg. Volume: 799,213
• PEG Ratio: 9.07
• Price to Book (P/B): 8.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.75
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 1.57
• Enterprise Value/Gross Profit: 9.93
• Enterprise Value/Ebitda: 4.50
• 1Y Price Target: $378.64
• Price Target Upside: 26.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: $336.00 ▲(12.57%Upside)

Waters Corporation's stock score reflects strong financial health and a positive outlook from recent corporate events, despite technical challenges. The merger with BD's Biosciences significantly boosts growth potential, while the earnings call supports a positive sentiment. However, technical indicators highlight short-term risks, and a relatively high valuation may limit immediate upside potential.

Positive Factors

Earnings

The merger is expected to create meaningful, rapid accretion, with EPS accretive in Year 1.

Revenue Streams

The merger with Becton Dickinson’s Biosciences & Diagnostic Solutions Business is expected to give Waters Corp more exposure to durable recurring revenue streams, increasing annual recurring revenues to over 70%.

Synergies

The transaction is expected to generate significant synergies, including $290 million in revenue synergies by year five post-closing and $200 million in cost synergies by year three post-closing.

Negative Factors

Market Reception

Market reception was skeptical, leading to a sharp decline in WAT shares by 14%.

Synergy Realism

Concerns exist about the realism of synergy targets, which are crucial for the financial profile of the merger.

Valuation Concerns

Investors appear concerned about the rich deal valuation and margin dilution, with limited near-term re-rating.

Waters Business Overview & Revenue Model

Company Description

Waters Corporation (WAT) is a leading global analytical instrument manufacturer and service provider specializing in technologies that enhance laboratory processes. The company is renowned for its high-performance liquid chromatography, mass spectrometry, and thermal analysis innovations. Waters serves a diverse range of sectors, including pharmaceuticals, life sciences, food and beverage, environmental, and industrial applications, offering critical tools and solutions that facilitate rigorous scientific research and quality control.

How the Company Makes Money

Waters Corporation generates revenue primarily through the sale of its analytical instruments and the provision of complementary services. The company sells advanced laboratory equipment, including chromatography and mass spectrometry systems, which are essential for precise measurement and analysis in various scientific fields. Additionally, Waters offers consumables, software solutions, and ongoing maintenance services, all of which contribute to recurring revenue streams. The company often engages in strategic partnerships and collaborations with leading research institutions and corporations to enhance its market reach and drive innovation, further supporting its revenue growth.

Waters Financial Statement Overview

Summary

Waters exhibits strong financial performance with high profitability metrics and effective cash flow generation. The company maintains an adequately managed balance sheet, though revenue growth remains stagnant, which slightly tempers the outlook.

Income Statement

Waters exhibits strong profitability with a gross profit margin of 62.1% and a net profit margin of 22.0% in the TTM period. The EBIT margin of 28.4% and EBITDA margin of 33.4% further highlight operational efficiency. However, revenue growth has been relatively flat in recent years, indicating a need for revitalization in growth strategies.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.78, suggesting a balanced capital structure. The equity ratio of 42.7% reflects a relatively stable financial position, though improvements can be made in leverage management. Return on Equity at 33.5% is impressive, driven by high net income relative to equity.

Cash Flow

Positive cash flow metrics are evident with a stable free cash flow to net income ratio of 0.94 and a robust operating cash flow to net income ratio of 1.15 in the TTM. Free cash flow growth is evident, albeit modest, suggesting effective capital expenditure management.

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
EBITDA	1.04B	1.00B	1.01B	958.42M	777.97M
Net Income	637.83M	642.23M	707.75M	692.84M	521.57M
Balance Sheet
Total Assets	4.55B	4.63B	3.28B	3.09B	2.84B
Cash, Cash Equivalents and Short-Term Investments	325.36M	395.97M	481.39M	569.28M	443.15M
Total Debt	1.70B	2.44B	1.65B	1.51B	1.36B
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

• Technical Analysis Sentiment: Negative
• Last Price: 298.47
• 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 298.47 is below the 20-day moving average (MA) of 324.82, below the 50-day MA of 339.65, and below the 200-day MA of 361.65, indicating a bearish trend. The MACD of -15.67 indicates Positive momentum. The RSI at 36.86 is Neutral, neither overbought nor oversold. The STOCH value of 23.52 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
IDXX	79 Outperform	$44.23B	50.82	59.33%	―	5.56%	4.66%
TMO	77 Outperform	$176.18B	27.01	13.46%	0.35%	2.05%	7.03%
A	75 Outperform	$33.94B	29.47	18.88%	0.81%	0.56%	-4.08%
WAT	71 Outperform	$17.77B	27.07	40.82%	―	2.57%	8.31%
DHR	68 Neutral	$141.70B	42.03	6.68%	0.58%	-3.24%	-16.60%
MTD	65 Neutral	$26.13B	31.36	-680.23%	―	1.18%	12.34%
Sector *	65 Neutral	¥355.44B	11.10	-2.99%	2.49%	11.76%	-10.16%

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.

The most recent analyst rating on (WAT) stock is a Hold with a $325.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

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.

The most recent analyst rating on (WAT) stock is a Hold with a $325.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

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.

The most recent analyst rating on (WAT) stock is a Hold with a $325.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.

Waters Corporation Re-elects Board at Annual Meeting

On May 22, 2025, Waters Corporation held its annual meeting of stockholders, with approximately 94.12% of shares entitled to vote being represented. During the meeting, all nominated directors were re-elected to the Board, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year.

The most recent analyst rating on (WAT) stock is a Hold with a $325.00 price target. To see the full list of analyst forecasts on Waters stock, see the WAT Stock Forecast page.