One-glance verdict
Overvalued
$72.15 our estimate vs market $462.72
Wall Street consensus: $465.86 (545.7% higher than our fair-value estimate)
541% above our estimate, beyond the bull case
Fundamentals snapshot
Waters Corporation
WAT · NYQ · Healthcare · Diagnostics & Research
Current price
$462.72
52-week range
$282.77 - $482.28
Market cap
$45.43B
Balance sheet
Stretched
11.54x Adequate
Net debt $4.94B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 46.7% last year.
- Reward Returns 1.9% on equity, ahead of 20% of its peers.
- Risk Stock trades 261.8% above its 5-year average P/E.
- Risk Operating margin compressed from 29.7% to 9.4% over 3 years.
What this company does
Waters Corporation
Waters Corporation sells the high-tech lab instruments and software that scientists use to discover new drugs, ensure food is safe, and conduct research. A significant portion of its sales comes from the disposable supplies and services customers must continuously buy to use the machines, creating recurring revenue (a predictable, ongoing income stream). Because its products are essential for healthcare and industrial customers, the company has a stable position in markets that are vital to public health and scientific advancement.
How the company got here
Waters Corporation was founded in 1958 by James L. Waters, starting as a research boutique that built custom scientific instruments. [2, 13, 14] A significant turning point came in 1965 when the company licensed a refractometer from Dow Chemical for analyzing plastics, which led to the development of their first liquid chromatography (LC) system. [2, 13, 14] This innovation laid the groundwork for Waters to become a leader in separation science. [14] Over the decades, the company expanded its offerings and expertise, notably through acquisitions like TA Instruments and Micromass, and more recently, Wyatt Technology, broadening its analytical capabilities. [1, 7] Waters went public in 1973 and has since grown into a global corporation focused on providing analytical workflow solutions. [2, 13]
What it actually does
Waters Corporation develops, manufactures, and sells systems and products that help scientists and researchers analyze and understand the composition of substances. Think of it like a highly sophisticated laboratory toolkit. Their instruments are used to separate, identify, and quantify different components within a sample, which is crucial for ensuring the quality, safety, and effectiveness of products across various industries. [2, 4, 9, 15] These tools are essential for research and development, quality control, and other laboratory applications. [4]
Waters
This is the largest part of Waters Corporation's business, making up about 54% of its revenue. [8] This segment focuses on providing comprehensive analytical workflow solutions, primarily through liquid chromatography (LC) and mass spectrometry (MS) technology systems. [1, 5, 8] These systems are used by customers in industries like pharmaceuticals, biotechnology, and food safety to discover new drugs, ensure product quality, and conduct environmental testing. [2, 4, 8] The company also sells related products such as chromatography columns and other consumable supplies that are essential for running these instruments, as well as software to manage and analyze the data generated. [1, 2, 9, 16]
TA Instruments
This segment, which represents about 18% of Waters' revenue, is dedicated to materials characterization. [8] TA Instruments designs, manufactures, and sells instruments for thermal analysis, rheometry, and calorimetry. [1, 4] These tools help scientists understand the physical properties and stability of materials like polymers, chemicals, and pharmaceuticals. [1, 4] For example, a company developing a new plastic might use TA Instruments' equipment to see how the material behaves under different temperatures or stresses. [1]
Waters Advanced Diagnostics
This segment, accounting for roughly 27.5% of revenue, focuses on diagnostic solutions. [8] While specific details on this segment are less prominent in the provided information, it generally involves analytical tools and software used in clinical and diagnostic settings. [4, 8] This could include instruments used for disease research or testing in healthcare environments.
What management is betting on now
Waters' management is focused on several key strategies to drive future growth. They aim to strengthen their core business in regulated markets, like pharmaceuticals, by continuing to innovate in areas such as biologics and large-molecule analysis. [1, 11] The company is also investing in digital and informatics workflows, essentially making their instruments and software more connected and intelligent. [1, 12] Additionally, Waters is looking to expand its market share and is open to disciplined acquisitions to bring in new capabilities. [1, 3, 11] They are also focusing on operational efficiency to improve how they run the business and are exploring the use of artificial intelligence (AI) to enhance their products and customer support. [3, 11, 17]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$97.66M
FY2025 Q1
$233.55M
FY2025 Q2
$18.14M
FY2025 Q4
$100.81M
FY2026 Q2
$-42.00M
FY2026 Q3
$153.00M
Revenue
$1.65B
Net income
$-136.00M
Diluted EPS
-1.39
Operating cash flow
$201.00M
Free cash flow
$153.00M
Fetching…
Sources
Revenue
$1.27B
Net income
$-72.00M
Diluted EPS
-0.87
Operating cash flow
$-3.00M
Free cash flow
$-42.00M
Fetching…
Sources
Revenue
$932.36M
Net income
$225.21M
Diluted EPS
3.77
Operating cash flow
$164.55M
Free cash flow
$100.81M
Fetching…
Sources
Revenue
$799.89M
Net income
$148.92M
Diluted EPS
2.50
Operating cash flow
$187.31M
Free cash flow
—
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Sources
Revenue
$771.33M
Net income
$147.11M
Diluted EPS
2.47
Operating cash flow
$41.14M
Free cash flow
$18.14M
Fetching…
Sources
Revenue
$661.71M
Net income
$121.38M
Diluted EPS
2.03
Operating cash flow
$259.55M
Free cash flow
$233.55M
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Sources
Revenue
$872.71M
Net income
$231.40M
Diluted EPS
3.88
Operating cash flow
$240.14M
Free cash flow
$97.66M
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Sources
Is it cheap or expensive?
Fair value $72.15 vs current price $462.72
Wall Street consensus is the average analyst price target: $465.86 (545.7% higher than our fair-value estimate).
Our most-likely fair value is $72.15 a share — about 84.4% below today's price of $462.72, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $4.9B. Interest coverage 11.5x.
Net debt
$4.94B
Interest coverage
11.54x
Waters Corporation's profit covers its interest bill about 11.5 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
WAT
BASELINE
Waters Corporation
Total debt $5.48B Interest coverage 11.54x This is the baseline the peer rows are being compared against.
Total debt $4.15B Interest coverage 13.21x +14% vs WAT Has roughly the same debt cushion as WAT.
Total debt $41.37B Interest coverage 5.72x -50% vs WAT Carries about 2.0x less debt cushion than WAT.
Total debt $27.78B Interest coverage 17.70x +53% vs WAT Carries about 1.5x more debt cushion than WAT.
Total debt $2.14B Interest coverage 16.32x +41% vs WAT Carries about 1.4x more debt cushion than WAT.
Total debt $1.86B Interest coverage 3.91x -66% vs WAT Carries about 2.9x less debt cushion than WAT.
What you should know
The case for and against WAT
3 Rewards
3 Risks
Rewards
-
Revenue grew 46.7% last year.
-
Returns 1.9% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 261.8% above its 5-year average P/E.
-
Operating margin compressed from 29.7% to 9.4% over 3 years.
-
Insider ownership is only 0.1% (peer median: 0.4%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
117.14x
Forward P/E
27.96x
P/B
2.99x
P/S
9.78x
EV/EBITDA
34.71x
PEG ratio
1.72x
Profitability
How much profit each dollar creates
Gross margin
56.3%
Operating margin
9.4%
Net margin
3.6%
ROE
1.9%
ROA
3.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.36x
Current ratio
1.86x
Quick ratio
1.05x
Total debt
$5.48B
Total cash
$539.00M
Growth
How the business has been compounding
Revenue TTM
$4.64B
Revenue 5Y CAGR
3.2%
EPS TTM
3.95
EPS 5Y CAGR
-2.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$549.86M
Free CF TTM
$539.81M
FCF margin
11.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
1996-11-26