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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
Extremely low leverage (debt-to-equity ~0.014 in 2025) gives Waterdrop durable financial flexibility to fund growth, repurchases and dividends without stressing solvency. This lowers refinancing risk and supports multi‑year investment or downturn resilience for the platform.
Negative Factors
Operating Costs Rising Faster Than Revenue
Operating expenses rising 71.5% YoY outpaced revenue growth, pressuring margins and free cash flow. If elevated cost levels become structural, return profiles and cash conversion could deteriorate, making future profitability contingent on sustained high ROI from current investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Extremely low leverage (debt-to-equity ~0.014 in 2025) gives Waterdrop durable financial flexibility to fund growth, repurchases and dividends without stressing solvency. This lowers refinancing risk and supports multi‑year investment or downturn resilience for the platform.
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
$418.62M
Dividend Yield2.12%
Average Volume (3M)192.64K
Price to Earnings (P/E)1.0
Beta (1Y)1.03
Revenue Growth61.37%
EPS Growth44.39%
CountryUS
Employees3,018
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)7.93
Shares Outstanding279,111,450
10 Day Avg. Volume142,770
30 Day Avg. Volume192,642
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 Cap4.34
Enterprise Value/Revenue0.41
Enterprise Value/Gross Profit0.76
Enterprise Value/Ebitda4.86
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.18
Revenue Forecast (FY)$5.58B
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 ...
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 | 4.44B | 3.87B | 2.77B | 2.63B | 2.80B | 3.21B |
| Gross Profit | 2.40B | 1.98B | 1.46B | 1.04B | 1.47B | 1.86B |
| EBITDA | 373.28M | 374.67M | 191.71M | 6.81M | 500.96M | -1.84B |
| Net Income | 556.28M | 553.44M | 367.51M | 167.22M | 607.72M | -1.57B |
Balance Sheet | ||||||
| Total Assets | 7.73B | 7.11B | 6.45B | 6.15B | 5.92B | 5.25B |
| Cash, Cash Equivalents and Short-Term Investments | 1.82B | 1.66B | 2.60B | 3.39B | 3.70B | 2.79B |
| Total Debt | 294.35M | 70.57M | 243.92M | 197.76M | 14.05M | 58.59M |
| Total Liabilities | 2.53B | 1.95B | 1.58B | 1.47B | 1.16B | 1.28B |
| Stockholders Equity | 5.10B | 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
1.40
Negative
1.54
Negative
1.65
Negative
Market Momentum
-0.07
Negative
35.38
Neutral
30.56
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 above the 20-day moving average (MA) of 1.21, above the 50-day MA of 1.40, and above the 200-day MA of 1.65, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 35.38 is Neutral, neither overbought nor oversold. The STOCH value of 30.56 is Neutral, 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 | $1.20B | 10.41 | 17.87% | 4.00% | -4.12% | ― | |
79 Outperform | $664.48M | 0.43 | 39.76% | ― | ― | ― | |
74 Outperform | $418.62M | 0.98 | 10.94% | 2.12% | 61.37% | 44.39% | |
72 Outperform | $1.91B | 45.35 | -30.35% | ― | 17.56% | -3.08% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
47 Neutral | $27.31M | >-0.01 | -71.55% | ― | -130.89% | ― |
* Financial Sector Average
WDH
Waterdrop
1.15
-0.27
-19.01%
FGNX
Fundamental Global
5.08
-81.92
-94.16%
IGIC
International General Insurance Holdings
28.53
6.02
26.73%
GSHD
GooseHead Insurance
54.87
-41.72
-43.19%
YB
Yuanbao, Inc. Unsponsored ADR
14.46
-13.42
-48.13%
Waterdrop Corporate Events
Waterdrop Names New Independent Director and Audit Chair as Board Reshuffles
Jun 23, 2026
Waterdrop Inc. announced on June 23, 2026, that it has appointed Ms. Qianfei Chang as an independent director effective July 1, 2026, where she will also serve as chair of the audit committee and sit on both the compensation and nominating and cor...
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...
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.