Waterdrop (WDH) AI Stock Analysis

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Waterdrop

(NYSE:WDH)

68Neutral

Waterdrop's overall stock score of 68 reflects strong financial performance and earnings call highlights, including revenue growth and technological advancements. However, technical analysis indicates a cautious outlook, and cash flow management remains a concern. The stock is attractively valued, though challenges in the insurance segment and rising operating costs require attention.

Waterdrop (WDH) vs. S&P 500 (SPY)

Market Cap

$558.22M

Dividend Yield1.04%

Average Volume (3M)181.36K

Price to Earnings (P/E)11.2

Beta (1Y)0.60

Revenue Growth3.76%

EPS Growth119.46%

CountryUS

Employees3,057

SectorFinancial

Sector Strength85

IndustryInsurance - Diversified

Share Statistics

EPS (TTM)<0.01

Shares Outstanding281,472,020

10 Day Avg. Volume165,433

30 Day Avg. Volume181,358

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)0.10

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Waterdrop Business Overview & Revenue Model

Company DescriptionWaterdrop Inc., through its subsidiaries, provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People's Republic of China. The company offers short-term health and long-term health and life insurance products and services. It also operates a medical crowdfunding platform. The company was founded in 2016 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes MoneyWaterdrop makes money primarily through its insurance brokerage services, where it earns commission fees by facilitating the sale of insurance products from various insurers to consumers. The company’s platform offers a wide range of insurance products, including health, life, and accident insurance, allowing users to compare and purchase policies that best suit their needs. Waterdrop also generates revenue through its medical crowdfunding platform, which charges service fees for successfully funded projects. Additionally, its mutual aid segment, although not a direct revenue stream, attracts users who may later convert to insurance products, thereby increasing overall customer engagement and potential sales. Strategic partnerships with insurance providers and a strong digital presence significantly contribute to Waterdrop's earnings by enhancing its product offerings and expanding its user base.

Waterdrop Financial Statement Overview

Summary

Waterdrop demonstrates a stable balance sheet with low leverage and strong equity ratios, which is advantageous in the insurance industry. However, the income statement reveals profitability challenges, with declining revenues and thin margins. Cash flow management is effective, although the recent decrease in free cash flow warrants attention. The company must focus on improving revenue growth and operational efficiencies to bolster financial performance.

Income Statement

Positive

Waterdrop has seen a decrease in total revenue from 2022 to 2023, indicating a revenue decline of approximately 6.1%. The gross profit margin stands at 39.7%, reflecting moderate profitability. However, the net profit margin is low at 6.4%, and the company has a negative EBIT margin, indicating operational challenges. The EBITDA margin is slightly positive at 0.3%, but overall profitability remains a concern.

Balance Sheet

Positive

The company exhibits a strong equity position with stockholders' equity representing 74.6% of total assets. The debt-to-equity ratio is low at 0.04, showcasing limited leverage. Return on equity is modest at 3.6%, reflecting low returns on investments.

Cash Flow

Positive

Waterdrop's operating cash flow to net income ratio is 2.43, indicating efficient cash generation relative to earnings. However, free cash flow has decreased significantly from the previous year, resulting in a negative growth rate of -47.9%. The free cash flow to net income ratio is 2.35, suggesting effective cash flow management despite declining free cash flow.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
2.73B	2.63B	2.80B	3.21B	3.03B	1.51B
	Gross Profit
1.46B	1.04B	1.78B	2.15B	2.29B	1.22B
	EBIT
123.30M	-6.74M	239.50M	-1.86B	-496.25M	-194.48M
	EBITDA
127.03M	6.81M	500.96M	-1.84B	-483.18M	-187.79M
	Net Income Common Stockholders
264.72M	167.22M	607.72M	-1.57B	-663.85M	-321.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.19M	3.39B	3.70B	2.79B	2.26B	1.02B
	Total Assets
638.98M	6.15B	5.92B	5.25B	4.71B	2.56B
	Total Debt
10.82M	197.76M	14.05M	58.59M	64.26M	43.30M
	Net Debt
-230.29M	-199.15M	-1.56B	-759.13M	-997.70M	-921.18M
	Total Liabilities
263.60M	1.47B	1.16B	1.28B	1.52B	1.05B
	Stockholders Equity
375.38M	4.59B	4.77B	3.97B	3.18B	1.50B
Cash Flow		Free Cash Flow
0.00	392.99M	753.82M	-1.13B	-803.82M	-546.16M
	Operating Cash Flow
0.00	406.52M	765.71M	-1.10B	-777.11M	-532.89M
	Investing Cash Flow
0.00	-1.17B	-139.82M	-846.90M	-1.22B	-45.95M
	Financing Cash Flow
0.00	-377.24M	-57.46M	2.12B	2.05B	1.47B

Waterdrop Technical Analysis

Technical Analysis Sentiment

Positive

Last Price1.54

Price Trends

50DMA

1.33

Positive

100DMA

1.27

Positive

200DMA

1.18

Positive

Market Momentum

MACD

0.04

Negative

RSI

60.94

Neutral

STOCH

80.17

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDH, the sentiment is Positive. The current price of 1.54 is above the 20-day moving average (MA) of 1.32, above the 50-day MA of 1.33, and above the 200-day MA of 1.18, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 60.94 is Neutral, neither overbought nor oversold. The STOCH value of 80.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 0 New Risks

Waterdrop Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGIC	79 Outperform	$1.09B	8.85	20.50%	0.41%	13.29%	17.14%
ESGR	77 Outperform	$4.99B	10.69	8.56%	―	10.70%	-39.16%
GSHD	69 Neutral	$4.27B	94.90	60.58%	―	21.60%	90.80%
FIHL	69 Neutral	$1.96B	17.57	-0.42%	2.28%	23.28%	-103.35%
WDH	68 Neutral	$558.22M	11.22	7.70%	1.04%	3.76%	119.46%
Sector *	64 Neutral	$12.82B	9.83	7.68%	17000.34%	12.38%	-5.56%
FGF	48 Neutral	$20.99M	11.46	-41.35%	―	27.74%	-33.99%

* Financial Sector Average

Performance Comparison

WDH

Waterdrop

1.54

0.30

24.19%

ESGR

Enstar Group

334.40

30.39

10.00%

FGF

Fundamental Global

16.50

-10.50

-38.89%

IGIC

International General Insurance Holdings

24.09

10.11

72.32%

GSHD

GooseHead Insurance

113.83

52.91

86.85%

FIHL

Fidelis Insurance Holdings Ltd.

17.57

-0.27

-1.51%

Waterdrop Earnings Call Summary

Earnings Call Date:Mar 12, 2025

(Q4-2024)

% Change Since: 28.33%|

Next Earnings Date:Jun 12, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook with significant achievements in revenue growth, profitability, and technological advancements, particularly in AI and insurtech. However, some challenges were noted in the insurance segment's revenue and operating costs.

Q4-2024 Updates

Positive Updates

Record Annual Revenue Growth

Waterdrop's annual revenue reached $2.77 billion, up by 5.4% year-over-year, with a solid Q4 performance of $687 million in total revenue.

Consistent Profitability

The company achieved a net profit attributable to ordinary shareholders of over $99.6 million in Q4 and has remained profitable for twelve consecutive quarters.

Cash Dividend Announcement

Waterdrop announced a cash dividend of $0.20 per ordinary share and $0.02 per ADS, reflecting the company's stable operations and significant profit increase.

AI and Insurtech Advancements

The company deployed AI tools and large language models in 2024, significantly enhancing online sales, broker support, and operational efficiencies.

Insurance Business Growth

The insurance business achieved FYP of about RMB1.9 billion, representing 24.5% year-over-year growth in Q4, driven by breakthroughs in customer acquisition channels.

Recognition and Compliance Achievements

Waterdrop Medical Crowdfunding was officially recognized as a pioneer in China's medical profiling sector, following new legislation and security designation.

Negative Updates

Insurance Revenue Decline

Insurance-related revenue reached RMB $580 million, down 1% year-over-year and 3% quarter-on-quarter, indicating challenges in sustaining revenue growth.

Quarter-on-Quarter Insurance FYP Decrease

The insurance business showed a 7% quarter-on-quarter decrease in FYP despite overall growth, affected by product suspension and seasonal factors.

Operating Cost Increase

Operating costs increased by 7.2% year-over-year to $323.8 million in Q4, primarily due to a rise in referral and service fees.

Company Guidance

During the fourth quarter of fiscal year 2024, Waterdrop reported a solid financial performance with total revenue reaching $687 million, marking a 4.2% increase year-over-year. For the entire year, the company achieved a revenue of $2.77 billion, reflecting a 5.4% year-over-year growth. The net profit attributable to ordinary shareholders for Q4 was $99.6 million, contributing to a doubling of annual profits. Waterdrop announced a third cash dividend of $0.20 per ordinary share and $0.02 per ADS, with shareholders on record as of April 11, 2025, being eligible. The company also repurchased approximately 52.1 million ADS at a cost of $104 million. Waterdrop's insurance business reported a first-year premium (FYP) of about RMB1.9 billion, a 24.5% year-over-year increase, despite a 7% quarter-on-quarter decrease. Insurance-related revenue was RMB580 million, showing a 1% decrease from the previous year. The company continued its AI-driven initiatives, including launching AI tools and large language models, which contributed to enhancing operational efficiency while maintaining profitability. Waterdrop's cash position as of December 31, 2024, was $3.67 billion, supporting future growth plans.

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.