One-glance verdict
Undervalued
$6.15 our estimate vs market $1.04
Wall Street consensus: $1.72 (-72.0% lower than our fair-value estimate)
83% below our estimate, below the bear case
Fundamentals snapshot
Waterdrop Inc.
WDH · NYQ · Financial Services · Insurance - Diversified
Current price
$1.04
52-week range
$0.96 - $2.03
Market cap
$373.67M
Balance sheet
Healthy
2.73x Stretched
Net cash $111.52M. 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 49.8% last year.
- Reward Returns 10.6% on equity, ahead of 20% of its peers.
- Risk Stock trades 172.6% above its 5-year average P/E.
- Risk Forward P/E (6.3x) is higher than trailing (5.0x) - earnings are expected to drop.
What this company does
Waterdrop Inc.
Waterdrop is a Chinese company that acts like an online insurance matchmaker, connecting people with health and life insurance plans and earning most of its money from brokerage fees (a commission paid by insurance companies for each policy sold). It also runs a medical crowdfunding platform and helps drug companies find patients for trials, creating a broader healthcare ecosystem (a network of related services) designed to attract and keep customers for its main insurance business.
How the company got here
Waterdrop Inc. was started in 2016 with the goal of using technology to help people with their healthcare and insurance needs. It began by launching a medical crowdfunding platform, a service that allows people to raise money for medical expenses from a large number of people online. A year later, the company introduced its online insurance marketplace, connecting users with insurance products from different companies. Over the years, Waterdrop has expanded its services to include assistance with clinical trials and other healthcare services, growing into a broader technology platform for insurance and healthcare. In May 2021, the company became publicly traded on the New York Stock Exchange.
What it actually does
Waterdrop is a technology company that provides a range of online services related to insurance and healthcare in China. Think of it as a digital helper for your health and financial protection needs. They offer an online platform where you can compare and buy health and life insurance policies from various insurance companies. They also run a platform that allows people to raise funds for medical treatments they can't afford. Additionally, they help pharmaceutical companies find patients to participate in clinical trials (the process of testing new medicines).
Waterdrop Insurance Marketplace
This is the company's main way of making money, bringing in the vast majority of its revenue. It's an online platform where people can shop for and purchase health and life insurance plans from different insurance companies. Waterdrop acts as a broker, meaning they don't provide the insurance themselves but help you find a suitable plan from their partner insurance carriers. They earn money by receiving commissions from the insurance companies for each policy sold through their platform. The platform is designed to make buying insurance easier, with tools to compare products and manage policies online.
Waterdrop Medical Crowdfunding
This service allows individuals facing high medical costs to create online fundraising campaigns to ask for financial help from the public. Friends, family, and even strangers can donate money to help cover the patient's medical bills. Waterdrop does not charge any fees for these crowdfunding campaigns. While this part of the business doesn't directly make money, it helps build a large community of users who may later purchase insurance products through their marketplace.
E-Find
This is a smaller but growing part of Waterdrop's business that connects patients with clinical trials for new drugs and treatments. Pharmaceutical companies and research organizations pay Waterdrop to help them find suitable participants for their studies from Waterdrop's large user base. This service helps to speed up the development of new medicines by making the patient recruitment process more efficient.
What management is betting on now
Waterdrop's leadership is heavily focused on using artificial intelligence (AI) to improve all aspects of its business. They are investing in AI to make their insurance recommendations more personalized, streamline customer service, and increase overall operational efficiency (the ability to run the business smoothly without wasting resources). The company aims to continue growing its core insurance business while also expanding its technology services for other companies in the insurance industry. By focusing on technology and a wide range of healthcare services, Waterdrop aims to become a leading global platform for both financial and healthcare needs.
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
$29.98M
FY2025 Q4
$30.64M
Revenue
$568.81M
Net income
—
Diluted EPS
0.02
Operating cash flow
$34.88M
Free cash flow
$30.64M
Fetching…
Sources
Revenue
$379.74M
Net income
—
Diluted EPS
0.01
Operating cash flow
$59.90M
Free cash flow
$29.98M
Fetching…
Sources
Is it cheap or expensive?
Fair value $6.15 vs current price $1.04
Wall Street consensus is the average analyst price target: $1.72 (-72.0% lower than our fair-value estimate).
Our most-likely fair value is $6.15 a share — about 491.0% above today's price of $1.04, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $111.5M - more cash than debt. Interest coverage 2.7x.
Net debt
$-111.52M
Interest coverage
2.73x
Waterdrop Inc.'s profit covers its interest bill about 2.7 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
WDH
BASELINE
Waterdrop Inc.
Total debt $74.23M Interest coverage 2.73x This is the baseline the peer rows are being compared against.
Total debt $398.02M Interest coverage 1.66x -39% vs WDH Carries about 1.6x less debt cushion than WDH.
Total debt $176.71M Interest coverage 3.16x +16% vs WDH Carries about 1.2x more debt cushion than WDH.
Total debt $1.94M Interest coverage 18.63x +582% vs WDH Carries about 6.8x more debt cushion than WDH.
Total debt $197.80M Interest coverage 2.94x +8% vs WDH Has roughly the same debt cushion as WDH.
Total debt $50.70M Interest coverage -0.85x -100% vs WDH This peer has almost no interest-payment cushion compared with WDH.
What you should know
The case for and against WDH
3 Rewards
3 Risks
Rewards
-
Revenue grew 49.8% last year.
-
Returns 10.6% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 172.6% above its 5-year average P/E.
-
Forward P/E (6.3x) is higher than trailing (5.0x) - earnings are expected to drop.
-
Insider ownership is only 2.5% (peer median: 12.4%).
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)
4.95x
Forward P/E
6.33x
P/B
0.49x
P/S
0.07x
EV/EBITDA
-0.65x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
57.1%
Operating margin
7.7%
Net margin
10.7%
ROE
10.6%
ROA
3.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.09x
Current ratio
2.19x
Quick ratio
1.74x
Total debt
$74.23M
Total cash
$185.74M
Growth
How the business has been compounding
Revenue TTM
$1.73B
Revenue 5Y CAGR
3.1%
EPS TTM
0.21
EPS 5Y CAGR
0.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$263.06M
Free CF TTM
$30.64M
FCF margin
1.8%
Dividend
Shareholder payout
Yield
5.8%
Payout ratio
29.9%
Last ex-div date
2026-10-09