Waterdrop, Inc. ADR Class A (WDH)
NYSE:WDH
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Waterdrop
(NYSE:WDH)
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Rating:74Outperform
Price Target:
$1.50
▼(-16.67% Downside)
Action:Reiterated
Date:06/17/26
The score is led by strong financial positioning (low leverage, improved profitability and growth) and very attractive valuation (ultra-low P/E and solid dividend yield). These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and earnings-call risks around elevated marketing/AI investment driving cost pressure and recent net profit decline.
Positive Factors
Conservative balance sheet & low leverage
Very low leverage and rising ROE provide durable financial flexibility, lowering solvency risk and enabling continued investment or buybacks without refinancing pressure. This supports multi-quarter resilience during cyclical revenue swings and funds strategic initiatives without stressing liquidity.
Negative Factors
Operating costs rising faster than revenue
Expense growth outpacing revenue compresses margins and can weaken durable profitability if higher spend becomes structural. Persistent elevated operating costs reduce free cash flow conversion and make long-term returns more sensitive to growth execution and efficiency gains from AI investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet & low leverage
Very low leverage and rising ROE provide durable financial flexibility, lowering solvency risk and enabling continued investment or buybacks without refinancing pressure. This supports multi-quarter resilience during cyclical revenue swings and funds strategic initiatives without stressing liquidity.
Read all positive factors
Waterdrop Key Performance Indicators (KPIs)
Any
Operating Income by Segment
How profitable each segment is after core operating costs, showing which parts of the business actually contribute to earnings versus which are loss-making or still being invested in. Helps investors assess margin strength, capital allocation choices, and whether the company can convert revenue growth into durable profits and cash flow.
How profitable each segment is after core operating costs, showing which parts of the business actually contribute to earnings versus which are loss-making or still being invested in. Helps investors assess margin strength, capital allocation choices, and whether the company can convert revenue growth into durable profits and cash flow.
Data provided by:
The Fly
The FlyWaterdrop (WDH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$447.50M
Dividend Yield2.12%
Average Volume (3M)198.35K
Price to Earnings (P/E)0.5
Beta (1Y)0.98
Revenue Growth61.37%
EPS Growth44.39%
CountryUS
Employees3,057
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)1.23
Shares Outstanding279,111,450
10 Day Avg. Volume229,906
30 Day Avg. Volume198,351
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.09
Price to Sales (P/S)0.12
P/FCF Ratio2.24
Enterprise Value/Market Cap4.06
Enterprise Value/Revenue0.61
Enterprise Value/Gross Profit1.48
Enterprise Value/Ebitda7.18
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.03
Revenue Forecast (FY)$5.06B
Waterdrop Business Overview & Revenue Model
Company Description
Waterdrop Inc. serves as a digital insurance intermediary within the People's Republic of China, facilitating connections between users and a diverse range of insurance products provided by various third-party underwriters. The company's portfolio...
How the Company Makes Money
Waterdrop primarily makes money through commissions and service fees earned from facilitating the sale of insurance products to customers. Its core revenue stream is insurance brokerage: when users purchase policies from insurance carriers through...
Waterdrop Earnings Call Summary
Earnings Call Date:Jun 16, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Sep 09, 2026
Earnings Call Sentiment Neutral
The call presented a mix of very strong growth and strategic technology progress alongside material near-term cost pressures. Revenue and insurance income grew sharply (64.8% and 74.1% YoY respectively), AI/IP developments and social impact metrics were notable positives, and the company maintained a healthy cash position and ongoing capital returns. However, operating expenses rose faster than revenue (total expenses +71.5% YoY), sales & marketing spending increased dramatically (+214.5% YoY), and net profit declined 9.1% YoY, showing margin compression as the company prioritizes user acquisition and AI investments. Management is guiding to continued top-line growth (~40% for 2026) while expecting operating profit scale to be broadly stable, signaling a strategy of deliberate investment for longer-term gains.Positive Updates
Robust Top-Line Growth
Total revenue of RMB 1.24 billion in Q1 2026, up 64.8% year-over-year, demonstrating strong demand and momentum across the business.
Negative Updates
Net Profit Decline
Net profit attributable to ordinary shareholders was approximately RMB 98.4 million, down 9.1% year-over-year despite strong revenue growth, due in part to elevated operating expenses and net operating items this quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Robust Top-Line Growth
Total revenue of RMB 1.24 billion in Q1 2026, up 64.8% year-over-year, demonstrating strong demand and momentum across the business.
Read all positive updates
Company Guidance
Management guided to target approximately 40% top‑line growth for 2026 while keeping operating profit scale "broadly stable" as they increase marketing and AI investments, saying the current spending should unlock greater profit potential over time and user‑base expansion will support long‑term development; this outlook follows Q1 results of RMB 1.24 billion revenue (up 64.8% YoY), insurance‑related income of ~RMB 1.15 billion (up 74.1% YoY) with an insurance operating margin of 13.3%, Q1 operating profit of ~RMB 79.95 million and net profit attributable of ~RMB 98.4 million, and management noted cash and short‑term investments of ~RMB 2.88 billion, cumulative ADS repurchases of ~61.8 million (~$120M) and a recent cash dividend of ~$10.8M.Waterdrop Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.98B | 3.87B | 2.77B | 2.63B | 2.80B | 3.21B |
| Gross Profit | 1.23B | 1.98B | 1.46B | 1.04B | 1.47B | 1.86B |
| EBITDA | 252.66M | 374.67M | 191.71M | 6.81M | 500.96M | -1.84B |
| Net Income | 446.94M | 553.44M | 367.51M | 167.22M | 607.72M | -1.57B |
Balance Sheet | ||||||
| Total Assets | 6.52B | 7.11B | 6.45B | 6.15B | 5.92B | 5.25B |
| Cash, Cash Equivalents and Short-Term Investments | 1.66B | 1.66B | 2.60B | 3.39B | 3.70B | 2.79B |
| Total Debt | 79.81M | 70.57M | 243.92M | 197.76M | 14.05M | 58.59M |
| Total Liabilities | 1.51B | 1.95B | 1.58B | 1.47B | 1.16B | 1.28B |
| Stockholders Equity | 5.01B | 5.16B | 4.80B | 4.59B | 4.77B | 3.97B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 214.29M | 218.84M | 392.99M | 753.82M | -1.13B |
| Operating Cash Flow | 0.00 | 243.92M | 437.25M | 406.52M | 765.71M | -1.10B |
| Investing Cash Flow | 0.00 | -224.74M | 291.64M | -1.17B | -139.82M | -846.90M |
| Financing Cash Flow | 0.00 | -373.93M | -198.58M | -377.24M | -57.46M | 2.12B |
Waterdrop Technical Analysis
Negative
1.80
Price Trends
1.55
Negative
1.63
Negative
1.70
Negative
Market Momentum
-0.07
Positive
24.95
Positive
13.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDH, the sentiment is Negative. The current price of 1.8 is above the 20-day moving average (MA) of 1.43, above the 50-day MA of 1.55, and above the 200-day MA of 1.70, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 24.95 is Positive, neither overbought nor oversold. The STOCH value of 13.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDH.
Waterdrop Risk Analysis
Waterdrop disclosed 104 risk factors in its most recent earnings report. Waterdrop reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We have made investments in generative AI and may face uncertainties with respect to its commercialization and the evolving laws and regulations applicable to us. Q4, 2023
2.
We may be materially adversely affected by the changes and evolvement in the regulation of medical crowdfunding business. Q4, 2023
3.
The legal system in mainland China is evolving, which leads to uncertainties that could adversely affect us. Q4, 2023
Waterdrop Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.06B | 8.99 | 17.87% | 4.00% | -4.12% | ― | |
75 Outperform | $699.50M | 0.65 | 39.76% | ― | ― | ― | |
74 Outperform | $447.50M | 0.54 | 10.94% | 2.12% | 61.37% | 44.39% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $1.31B | 29.46 | -30.35% | ― | 17.56% | -3.08% | |
47 Neutral | $32.53M | >-0.01 | -71.55% | ― | -130.89% | ― |
* Financial Sector Average
WDH
Waterdrop
1.24
-0.17
-12.12%
FGNX
Fundamental Global
5.67
-83.08
-93.61%
IGIC
International General Insurance Holdings
24.79
3.53
16.63%
GSHD
GooseHead Insurance
36.88
-64.88
-63.76%
YB
Yuanbao, Inc. Unsponsored ADR
15.18
-5.91
-28.02%
Waterdrop Corporate Events
Waterdrop Posts Strong Q1 2026 Growth as AI Investments and Share Buybacks Accelerate
Jun 17, 2026
On June 16, 2026, Waterdrop reported unaudited results for the quarter ended March 31, 2026, highlighted by a 64.8% year-over-year jump in net operating revenue to RMB1,242.2 million and a 74.1% surge in insurance-related income to RMB1,145.8 mill...
Waterdrop Posts Surging 2025 Q4 Growth and Announces New Cash Dividend
Mar 25, 2026
Waterdrop Inc. reported unaudited results for the fourth quarter and full year 2025 on March 25, 2026, highlighting a sharp acceleration in growth and profitability driven by its AI-led strategy. Net operating revenue in the fourth quarter surged ...
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.