Waterdrop, Inc. ADR Class A (WDH)
NYSE:WDH
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Waterdrop
(NYSE:WDH)
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Rating:76Outperform
Price Target:
$2.00
▲(11.11% Upside)
Action:ReiteratedDate:05/01/26
The score is driven by strong financial fundamentals (profitability recovery and a very low-leverage balance sheet) and highly attractive valuation (very low P/E plus dividend yield). Earnings-call signals are constructive (double-digit growth targets and capital returns) but tempered by rapid expense growth and some reporting inconsistency. Technical signals are the main drag due to weak/neutral momentum versus longer-term averages.
Positive Factors
Conservative balance sheet
Extremely low leverage and rising equity give Waterdrop durable financial flexibility to fund AI investments, buybacks and dividends while absorbing cyclical swings in insurance flows. Low solvency risk supports long-term operational resilience and access to capital without pressure to cut growth.
Negative Factors
Rapid expense growth
Operating and total expense growth far outpaced recent revenue in periods, creating sustained margin pressure risk. If expense scaling (headcount, platform, marketing) fails to produce proportional lifetime customer value, profitability could be cyclical and returns on new investments may take many quarters to materialize.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Extremely low leverage and rising equity give Waterdrop durable financial flexibility to fund AI investments, buybacks and dividends while absorbing cyclical swings in insurance flows. Low solvency risk supports long-term operational resilience and access to capital without pressure to cut growth.
Read all positive factors
Waterdrop (WDH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$562.98M
Dividend Yield2.12%
Average Volume (3M)213.87K
Price to Earnings (P/E)0.8
Beta (1Y)0.92
Revenue Growth44.00%
EPS Growth56.57%
CountryUS
Employees3,057
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)1.23
Shares Outstanding279,111,450
10 Day Avg. Volume178,895
30 Day Avg. Volume213,867
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 Cap4.93
Enterprise Value/Revenue0.93
Enterprise Value/Gross Profit2.26
Enterprise Value/Ebitda10.99
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.16
Revenue Forecast (FY)$3.95B
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 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 Earnings Call Summary
Earnings Call Date:Mar 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jun 11, 2026
Earnings Call Sentiment Positive
The call highlights robust top-line growth (FY revenue +43.5%, Q4 revenue +105.5%), strong insurance segment performance (+51.3% full-year; Q4 insurance income +125%), meaningful AI and product innovation (72 LLM patents, AI-driven premium increases, national patent for patient-matching), sustained GAAP profitability (16 consecutive quarters), and active capital returns (dividend and ~$118M buyback). However, the company is investing heavily: operating costs and expenses rose sharply (quarterly increases ~109%), selling & marketing spend jumped ~178%, and referral/service fees materially increased. There is also an inconsistency in the reported full-year net profit growth rates in the transcript (54.8% vs. 4.8%), which clouds comparability. Overall, positive momentum in revenue, AI integration, and shareholder returns outweigh near-term cost headwinds and reporting clarity issues.Positive Updates
Strong Full-Year Revenue Growth
Fiscal year 2025 revenue reached RMB 3.98 billion, up 43.5% year-over-year, reflecting robust top-line expansion across the business.
Negative Updates
Sharp Increase in Operating Costs and Expenses
Operating costs for the quarter reached RMB 680 million, up 109.2% year-over-year; total operating costs and expenses for the quarter rose to RMB 1.33 billion, up 109.4% year-over-year. Full-year operating costs and expenses increased 39.1% versus 2024, indicating margin pressure from rapid expansion.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Full-Year Revenue Growth
Fiscal year 2025 revenue reached RMB 3.98 billion, up 43.5% year-over-year, reflecting robust top-line expansion across the business.
Read all positive updates
Company Guidance
Management guided for 2026 to target double‑digit growth in both revenue and profit while modestly increasing marketing and AI investments; they framed this off FY2025 results of revenue of CNY 3.98 billion (up 43.5% y/y) and net profit attributable of CNY 570 million (company‑reported y/y growth ~54.8%), noting GAAP profitability for 16 consecutive quarters, a Board‑approved cash dividend of CNY 0.03 per ADS totaling $10.8 million (record date April 24, 2026), completed share repurchases of 60.7 million ADS for about $118 million, and 72 LLM‑related patent applications filed as they push to become an AI‑native company.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 | 2.98B | 3.87B | 2.77B | 2.63B | 2.80B | 3.21B |
| Gross Profit | 1.23B | 1.98B | 1.46B | 1.04B | 1.47B | 1.86B |
| EBITDA | 252.66M | 360.75M | 191.71M | 6.81M | 500.96M | -1.84B |
| Net Income | 446.94M | 553.44M | 367.51M | 167.22M | 607.72M | -1.57B |
Balance Sheet | ||||||
| Total Assets | 6.52B | 7.11B | 6.45B | 6.15B | 5.92B | 5.25B |
| Cash, Cash Equivalents and Short-Term Investments | 1.66B | 1.66B | 2.60B | 3.39B | 3.70B | 2.79B |
| Total Debt | 79.81M | 70.57M | 243.92M | 197.76M | 14.05M | 58.59M |
| Total Liabilities | 1.51B | 1.95B | 1.58B | 1.47B | 1.16B | 1.28B |
| Stockholders Equity | 5.01B | 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
Positive
1.80
Price Trends
1.73
Negative
1.77
Negative
1.75
Negative
Market Momentum
<0.01
Negative
55.91
Neutral
66.01
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 1.66, above the 50-day MA of 1.73, and above the 200-day MA of 1.75, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 55.91 is Neutral, neither overbought nor oversold. The STOCH value of 66.01 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.08B | 12.32 | 18.79% | 4.00% | -4.12% | ― | |
76 Outperform | $562.98M | 0.75 | 11.28% | 2.12% | 44.00% | 56.57% | |
75 Outperform | $720.69M | ― | 66.01% | ― | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $1.45B | 52.94 | -30.35% | ― | 17.56% | -3.08% | |
56 Neutral | $1.81B | 4.16 | 9.46% | 2.55% | 2.48% | 138.33% | |
47 Neutral | $42.20M | -0.21 | -72.14% | ― | -130.89% | ― |
* Financial Sector Average
WDH
Waterdrop
1.56
0.30
23.32%
FGNX
Fundamental Global
6.74
-77.01
-91.95%
IGIC
International General Insurance Holdings
25.31
3.66
16.93%
GSHD
GooseHead Insurance
40.86
-64.56
-61.24%
FIHL
Fidelis Insurance Holdings Ltd.
20.91
4.20
25.10%
YB
Yuanbao, Inc. Unsponsored ADR
15.64
0.82
5.53%
Waterdrop Corporate Events
Waterdrop Posts Surging 2025 Q4 Growth and Announces New Cash Dividend
Mar 25, 2026
Waterdrop Inc. reported unaudited results for the fourth quarter and full year 2025 on March 25, 2026, highlighting a sharp acceleration in growth and profitability driven by its AI-led strategy. Net operating revenue in the fourth quarter surged ...
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.