Waterdrop (WDH) AI Stock Analysis

• Market Cap: $650.99M
• Dividend Yield: 2.12%
• Average Volume (3M): 443.95K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 0.96
• Revenue Growth: 18.70%
• EPS Growth: 62.14%
• 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: 334,889
• 30 Day Avg. Volume: 443,955
• PEG Ratio: <0.01
• Price to Book (P/B): 0.07
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 1.45
• Enterprise Value/Market Cap: -0.45
• Enterprise Value/Revenue: -0.10
• Enterprise Value/Gross Profit: -0.24
• Enterprise Value/Ebitda: -1.16
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $2.00 ▲(11.11% Upside)

The score is driven primarily by improved profitability and a very strong, low-leverage balance sheet, supported by an attractive valuation (low P/E and a ~2.1% dividend yield). These positives are tempered by the key risk of weak cash generation in 2024 (zero operating/free cash flow) and only moderately positive technical momentum.

Positive Factors

Margin Expansion

The material expansion in gross and net margins with EBIT turning positive indicates sustainable improvements in pricing, mix or cost control. Higher operating profitability enhances the company’s ability to invest in product development, marketing and margin-protecting initiatives over the medium term.

Very Low Leverage

An extremely low debt-to-equity ratio and a high equity base provide significant financial flexibility and lower default risk. This conservative capital structure supports strategic investments, weathering demand shocks, and optionality for M&A or share returns without pressuring interest coverage over the coming quarters.

Diversified Revenue Model

Multiple sales channels plus subscription-based filter replacements create recurring and diversified revenue streams. This reduces reliance on one distribution channel, supports steadier topline visibility, and leverages secular trends in sustainability and at-home consumption to underpin durable demand over months.

Negative Factors

Weak Cash Conversion

Reporting zero operating and free cash flow despite higher net income signals weak cash conversion quality. If earnings do not translate into cash, the company may struggle to self-fund growth, servicing of commitments or share returns, increasing reliance on external financing and raising execution risk.

Segment Concentration Risk

Earnings concentration in the insurance segment reduces diversification and raises exposure to segment-specific regulatory, pricing or competitive shocks. Continued drag from crowdfunding limits overall margin expansion, making consolidated profitability more sensitive to the insurance business outlook over the medium term.

Management Turnover in Finance/Intl

Recent departures and replacements in finance and international leadership create transitional risk. Changes at the finance and international-business levels can disrupt reporting continuity, financial controls and execution of global expansion plans, introducing uncertainty into strategic initiatives over upcoming quarters.

Waterdrop Business Overview & Revenue Model

Company Description

Waterdrop 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 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: Negative
• Last Price: 1.80
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 below the 20-day moving average (MA) of 1.87, above the 50-day MA of 1.78, and above the 200-day MA of 1.63, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 45.12 is Neutral, neither overbought nor oversold. The STOCH value of 27.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDH.

Waterdrop Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGIC	79 Outperform	$1.05B	8.61	18.68%	4.00%	0.76%	―
YB	75 Outperform	$912.42M	2.27	82.04%	―	―	―
WDH	71 Outperform	$650.99M	9.40	10.37%	2.12%	18.70%	62.14%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GSHD	59 Neutral	$2.63B	62.68	―	―	24.81%	55.93%
FIHL	57 Neutral	$1.95B	-361.36	-0.57%	2.55%	11.71%	-101.08%
FGNX	46 Neutral	$128.22M	-0.30	-7.90%	―	-42.13%	-797.10%

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.

The most recent analyst rating on (WDH) stock is a Buy with a $2.00 price target. To see the full list of analyst forecasts on Waterdrop stock, see the WDH Stock Forecast page.

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.

The most recent analyst rating on (WDH) stock is a Buy with a $2.00 price target. To see the full list of analyst forecasts on Waterdrop stock, see the WDH Stock Forecast page.