Waterdrop (WDH) AI Stock Analysis

• Market Cap: $677.83M
• Dividend Yield: 2.2%
• Average Volume (3M): 221.83K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.91
• Revenue Growth: 12.30%
• EPS Growth: 55.85%
• Country: US
• Employees: 3,057
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 0.01
• Shares Outstanding: 281,472,020
• 10 Day Avg. Volume: 249,083
• 30 Day Avg. Volume: 221,827
• 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: 0.65
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 0.36
• Enterprise Value/Ebitda: 1.73
• 1Y Price Target: $2.00
• Price Target Upside: 11.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.06
• Revenue Forecast (FY): $476.31M

• Rating: 74 Outperform
• Price Target: $2.00 ▲(11.11% Upside)

Waterdrop's overall stock score is driven by strong earnings call results and a positive technical outlook. While financial performance shows profitability and stability, cash flow challenges need addressing. Valuation remains attractive with a reasonable P/E ratio and dividend yield.

Positive Factors

AI Integration

AI integration enhances operational efficiency, reducing costs and improving service quality, which can lead to sustained competitive advantages and profitability.

Insurance Business Growth

Strong growth in the insurance sector indicates robust demand and market penetration, supporting long-term revenue expansion and market leadership.

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial resilience, enabling strategic investments and weathering economic downturns.

Negative Factors

Cash Flow Challenges

Lack of cash flow generation can limit operational flexibility and investment capacity, potentially impacting long-term growth prospects.

Increased Operating Costs

Rising operating costs can pressure margins and profitability, necessitating efficiency improvements to maintain financial health.

Management Changes

Frequent management changes can disrupt strategic continuity and execution, potentially impacting long-term strategic initiatives.

Waterdrop Business Overview & Revenue Model

Company Description

Waterdrop (WDH) is a leading technology-driven platform focused on providing innovative water solutions. The company operates primarily in the water purification and beverage sectors, specializing in micro-drinking products and related services. Waterdrop is known for its compact water filters and flavoring drops, which enhance the drinking experience while promoting hydration. Its mission is to improve access to clean and healthy drinking water while reducing plastic waste through sustainable practices.

How the Company Makes Money

Waterdrop generates revenue through multiple channels, including the sale of its products such as water filters, flavoring drops, and other hydration-related accessories. The company operates an e-commerce platform where customers can purchase its products directly. Additionally, Waterdrop has established partnerships with retailers and distributors, expanding its market reach and increasing sales volume. Subscription services for filter replacements and flavoring products also contribute to recurring revenue. The company's focus on sustainability and health-conscious consumer trends further drives growth and profitability.

Waterdrop Financial Statement Overview

Summary

Waterdrop shows strong profitability and financial stability with improved income statement metrics and a robust balance sheet. However, the absence of operating and free cash flow in 2024 indicates potential cash management challenges.

Income Statement

Waterdrop has demonstrated a strong recovery in its income statement metrics. The company achieved a notable increase in its gross profit margin, from 39.7% in 2023 to 52.5% in 2024. The net profit margin also improved significantly, reaching 13.3% in 2024 compared to 6.4% in 2023. Revenue growth was steady at 5.4%. The EBIT margin turned positive, indicating improved operational performance. However, the EBITDA margin showed a modest increase, suggesting room for further enhancement in operational efficiency.

Balance Sheet

The balance sheet reflects a robust financial position with a low debt-to-equity ratio of 0.05, highlighting low leverage and financial stability. The return on equity improved to 7.7% in 2024, up from 3.6% in 2023, demonstrating better profitability. The equity ratio remained strong at 74.3%, indicating a solid equity base relative to total assets. The company's conservative debt management and strong equity position contribute to its financial resilience.

Cash Flow

Waterdrop's cash flow performance is mixed. The operating cash flow to net income ratio is unavailable for 2024 due to zero operating cash flow. The free cash flow to net income ratio could not be assessed for the same reason. The absence of free cash flow in 2024 indicates potential challenges in generating cash from operations, despite improvements in net income. This highlights a need for better cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.98B	2.77B	2.63B	2.80B	3.21B	3.03B
Gross Profit	1.23B	1.46B	1.04B	1.47B	1.86B	2.29B
EBITDA	252.66M	191.71M	6.81M	500.96M	-1.84B	-483.18M
Net Income	446.94M	367.51M	167.22M	607.72M	-1.57B	-663.87M
Balance Sheet
Total Assets	6.52B	6.45B	6.15B	5.92B	5.25B	4.71B
Cash, Cash Equivalents and Short-Term Investments	1.66B	2.60B	3.39B	3.70B	2.79B	2.26B
Total Debt	79.81M	243.92M	197.76M	14.05M	58.59M	64.26M
Total Liabilities	1.51B	1.58B	1.47B	1.16B	1.28B	1.52B
Stockholders Equity	5.01B	4.80B	4.59B	4.77B	3.97B	3.18B
Cash Flow
Free Cash Flow	0.00	218.84M	392.99M	753.82M	-1.13B	-803.82M
Operating Cash Flow	0.00	437.25M	406.52M	765.71M	-1.10B	-777.11M
Investing Cash Flow	0.00	291.64M	-1.17B	-139.82M	-846.90M	-1.22B
Financing Cash Flow	0.00	-198.58M	-377.24M	-57.46M	2.12B	2.05B

Waterdrop Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 1.8 is above the 20-day moving average (MA) of 1.70, above the 50-day MA of 1.77, and above the 200-day MA of 1.56, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 55.73 is Neutral, neither overbought nor oversold. The STOCH value of 72.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WDH.

Waterdrop Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGIC	79 Outperform	$1.06B	8.73	18.68%	4.16%	0.76%	―
WDH	74 Outperform	$677.83M	11.37	10.19%	2.20%	12.30%	55.85%
YB	72 Outperform	$930.91M	2.75	82.04%	―	―	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GSHD	59 Neutral	$2.77B	66.23	―	―	24.81%	55.93%
FIHL	57 Neutral	$1.96B	―	-0.57%	2.44%	11.71%	-101.08%
FGNX	42 Neutral	$120.56M	0.90	-8.64%	―	-68.66%	-857.71%

Waterdrop Corporate Events

Waterdrop Inc. Reports Strong Q3 2025 Financial Growth

On December 3, 2025, Waterdrop Inc. announced its unaudited financial results for the third quarter of 2025, showcasing substantial growth. The company reported a significant year-over-year increase in operating profit and net profit, driven by a 38.4% rise in net operating revenue. Insurance-related income saw a 44.8% increase, and the company expanded its medical crowdfunding and clinical trial services. Waterdrop’s advancements in AI technology have enhanced its operational efficiency, contributing to a 32.3% sequential increase in insurance premiums. The company also focused on improving transparency and fraud detection in its crowdfunding services, while expanding its collaboration network in clinical trials, leading to a 31.3% rise in related revenue. Waterdrop’s strategic initiatives and AI integration are expected to continue driving business momentum and delivering value to shareholders.

Waterdrop Inc. Announces Key Management Changes

On December 2, 2025, Waterdrop Inc. announced significant changes in its board and management composition. Mr. Guang Yang resigned from his roles as director, vice president of finance, and general manager of international business due to personal reasons. Ms. Xiaolei Sun was appointed as a new director, while Ms. Jieru Li took over as vice president of finance, responsible for accounting and financial matters. These changes are expected to bring new perspectives and strengthen the company’s strategic and financial operations.

Waterdrop Inc. Reports Strong Q2 2025 Results and Announces Cash Dividend

On September 4, 2025, Waterdrop Inc. announced its unaudited financial results for the second quarter of 2025, revealing a 58.7% increase in net profit and an 80.2% rise in first-year insurance premiums compared to the previous year. The company highlighted the successful integration of AI into its operations, which contributed to significant growth in revenue and profitability. Waterdrop also reported advancements in its medical crowdfunding and digital clinical trial services, alongside an enhanced cash dividend and a new share repurchase scheme, reflecting its commitment to shareholder returns.

Waterdrop Inc. Reports Strong Q2 2025 Results with Increased Dividend

On September 4, 2025, Waterdrop Inc. announced its unaudited financial results for the second quarter of 2025, highlighting a 58.7% year-over-year increase in net profit to RMB140.2 million. The company reported significant growth in its insurance business, with first-year premiums rising by 80.2% year-over-year, and an increase in net operating revenue by 23.9%. The integration of AI into its operations has driven productivity and service improvements, contributing to the company’s robust financial performance. Waterdrop also announced a cash dividend increase of 50% and the continuation of its share repurchase program, reflecting its commitment to shareholder returns.