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Waterdrop (WDH)
NYSE:WDH
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Waterdrop
(NYSE:WDH)
Rating:73Outperform
Price Target:
$2.00
▲(12.99% Upside)
Waterdrop (WDH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$661.84M
Dividend Yield0.87%
Average Volume (3M)447.32K
Price to Earnings (P/E)12.6
Beta (1Y)0.90
Revenue Growth2.64%
EPS Growth100.00%
CountryUS
Employees3,057
SectorFinancial
Sector Strength69
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)<0.01
Shares Outstanding281,472,020
10 Day Avg. Volume260,187
30 Day Avg. Volume447,324
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.33
Enterprise Value/Revenue0.08
Enterprise Value/Gross Profit0.15
Enterprise Value/Ebitda1.20
Forecast
1Y Price Target
$2.00Price Target Upside12.99% Upside
Rating ConsensusModerate Buy
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 generates revenue primarily through its insurance brokerage services, where it earns commissions on insurance policies sold through its platform. The company collaborates with numerous insurance providers to offer a wide range of products, including health, life, and accident insurance. Additionally, Waterdrop has developed a medical crowdfunding platform that allows individuals to raise funds for medical expenses, although this service typically focuses on user engagement rather than direct monetization. Key partnerships with insurance companies and healthcare institutions enhance Waterdrop's ability to provide comprehensive services, contributing to the company's overall earnings.
Waterdrop Earnings Call Summary
Earnings Call Date:Jun 05, 2025
(Q1-2025)
| % Change Since: 18.00%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Positive
The earnings call presents a positive outlook with robust revenue and profit growth, significant advancements in insurance product offerings, and improvements in operational efficiency. However, there are some concerns about the potential negative impact on annual profit due to increased investments and pressure on life insurance products.Q1-2025 Updates
Positive Updates
Revenue Growth
Waterdrop achieved a revenue of over RMB 750 million, marking a 7% year-over-year increase.
Profitability Achievement
Net profit attributable to ordinary shareholders was about RMB 110 million, showing a significant 34.2% year-over-year growth, marking the 13th consecutive quarter of GAAP profitability.
Insurance Business Growth
First-year premiums in the insurance business increased by 19% year-over-year, contributing to an 8% year-over-year increase in insurance revenue.
Innovative Insurance Products
Introduction of Million Medical Insurance product with health declaration waivers and guaranteed renewal, targeting chronic disease patients.
Cash Reserves and Dividends
Company maintains cash reserves of about RMB 3.54 billion, with a positive operating cash flow and a cash dividend distribution of $7.3 million.
Efficiency Improvements
General and administrative expenses decreased by 15.8% year-over-year due to improvements in management efficiency.
AI and Technology Advancements
Company has filed 51 patents related to LLM technology with improved operational efficiency across all business segments.
Negative Updates
Impact of Increased Investment
Anticipation of a certain negative impact on annual profit due to increased investment in driving business growth in the second half of the year.
Pressure on Life Insurance Products
Long-term insurance experienced a 1.6% year-over-year decline primarily due to pressure on life insurance products.
Company Guidance
During the first quarter of 2025, Waterdrop reported robust business growth, achieving a total revenue of RMB 754 million, marking a 7% year-over-year increase. The company's net profit attributable to ordinary shareholders grew by 34.2% year-over-year to approximately RMB 108 million. The insurance segment saw a 19.3% year-over-year increase in first-year premiums, totaling RMB 2.09 billion, while insurance-related revenue rose by 8.4% year-over-year to RMB 660 million. The operating profit from the insurance business reached RMB 150 million, with an operating profit margin of 23%. The company continued to innovate, launching new products like the upgraded maternity insurance and the industry-first Million Medical Insurance product with guaranteed renewal. R&D expenses increased by 3.6% to RMB 56 million. By the end of Q1, Waterdrop had repurchased 54.2 million ADS and distributed a third cash dividend of $7.3 million. The company maintains a robust cash reserve of RMB 3.54 billion, and it anticipates an annual revenue growth of over 20% year-over-year, despite potential negative impacts on profit due to increased investments in business growth.Waterdrop Financial Statement Overview
Summary
Waterdrop's financial performance shows strong profitability and a robust balance sheet, with significant improvements in income statement metrics and financial stability. 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.73
Positive
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.79
Positive
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.55
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.77B | 2.63B | 2.80B | 3.21B | 3.03B |
| Gross Profit | 1.46B | 1.04B | 1.78B | 2.15B | 2.29B |
| EBITDA | 191.71M | 6.81M | 500.96M | -1.84B | -483.18M |
| Net Income | 367.51M | 167.22M | 607.72M | -1.57B | -663.85M |
Balance Sheet | |||||
| Total Assets | 6.45B | 6.15B | 5.92B | 5.25B | 4.71B |
| Cash, Cash Equivalents and Short-Term Investments | 2.60B | 3.39B | 3.70B | 2.79B | 2.26B |
| Total Debt | 243.92M | 197.76M | 14.05M | 58.59M | 64.26M |
| Total Liabilities | 1.58B | 1.47B | 1.16B | 1.28B | 1.52B |
| Stockholders Equity | 4.80B | 4.59B | 4.77B | 3.97B | 3.18B |
Cash Flow | |||||
| Free Cash Flow | 218.84M | 392.99M | 753.82M | -1.13B | -803.82M |
| Operating Cash Flow | 437.25M | 406.52M | 765.71M | -1.10B | -777.11M |
| Investing Cash Flow | 291.64M | -1.17B | -139.82M | -846.90M | -1.22B |
| Financing Cash Flow | -198.58M | -377.24M | -57.46M | 2.12B | 2.05B |
Waterdrop Technical Analysis
Positive
1.77
Price Trends
1.60
Positive
1.47
Positive
1.34
Positive
Market Momentum
0.05
Positive
59.40
Neutral
26.72
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 1.77 is below the 20-day moving average (MA) of 1.77, above the 50-day MA of 1.60, and above the 200-day MA of 1.34, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 59.40 is Neutral, neither overbought nor oversold. The STOCH value of 26.72 is Neutral, 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 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.09B | 8.75 | 20.11% | 3.95% | 9.51% | ― | |
77 Outperform | ― | ― | 10.70% | -39.16% | |||
73 Outperform | $661.84M | 12.60 | 8.26% | 0.87% | 2.64% | 100.00% | |
69 Neutral | $18.67M | 3.70 | -24.49% | ― | 10.82% | ― | |
66 Neutral | $1.89B | 17.57 | -1.83% | 2.27% | 20.42% | -110.82% | |
63 Neutral | $3.24B | 77.42 | 60.58% | ― | 23.49% | 60.38% | |
61 Neutral | C$15.82B | 6.66 | 15.12% | 5.92% | 28.62% | -7.32% |
* Financial Sector Average
Performance Comparison
WDH
Waterdrop
1.85
0.83
81.37%
ESGR
Enstar Group
337.91
11.31
3.46%
FGNX
Fundamental Global
15.90
-10.35
-39.43%
IGIC
International General Insurance Holdings
25.26
8.50
50.72%
GSHD
GooseHead Insurance
89.49
13.49
17.75%
FIHL
Fidelis Insurance Holdings Ltd.
17.54
-0.76
-4.15%
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.