WATERS CORP (WAT) Stock Fundamental Analysis
NYSE:WAT - New York Stock Exchange, Inc. - US9418481035 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to WAT. WAT was compared to 55 industry peers in the Life Sciences Tools & Services industry. WAT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. WAT has a decent growth rate and is not valued too expensively. These ratings could make WAT a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
WAT had positive earnings in the past year.
In the past year WAT had a positive cash flow from operations.
Each year in the past 5 years WAT has been profitable.
WAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WAT (14.31%) is better than 92.73% of its industry peers.
With an excellent Return On Equity value of 33.48%, WAT belongs to the best of the industry, outperforming 96.36% of the companies in the same industry.
WAT has a better Return On Invested Capital (20.00%) than 94.55% of its industry peers.
WAT had an Average Return On Invested Capital over the past 3 years of 22.94%. This is significantly above the industry average of 13.60%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.31% | ||
| ROE | 33.48% | ||
| ROIC | 20% |
ROA(3y)16.49%
ROA(5y)18.04%
ROE(3y)77%
ROE(5y)128.85%
ROIC(3y)22.94%
ROIC(5y)25.43%
1.3 Margins
With an excellent Profit Margin value of 22.02%, WAT belongs to the best of the industry, outperforming 98.18% of the companies in the same industry.
In the last couple of years the Profit Margin of WAT has declined.
WAT has a better Operating Margin (28.34%) than 98.18% of its industry peers.
In the last couple of years the Operating Margin of WAT has remained more or less at the same level.
WAT's Gross Margin of 59.27% is fine compared to the rest of the industry. WAT outperforms 74.55% of its industry peers.
In the last couple of years the Gross Margin of WAT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.34% | ||
| PM (TTM) | 22.02% | ||
| GM | 59.27% |
OM growth 3Y-1.6%
OM growth 5Y-0.88%
PM growth 3Y-4.65%
PM growth 5Y-2.61%
GM growth 3Y0.51%
GM growth 5Y0.43%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WAT is creating value.
The number of shares outstanding for WAT has been increased compared to 1 year ago.
Compared to 5 years ago, WAT has less shares outstanding
WAT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.27 indicates that WAT is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.27, WAT belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
The Debt to FCF ratio of WAT is 2.35, which is a good value as it means it would take WAT, 2.35 years of fcf income to pay off all of its debts.
WAT's Debt to FCF ratio of 2.35 is amongst the best of the industry. WAT outperforms 83.64% of its industry peers.
WAT has a Debt/Equity ratio of 0.69. This is a neutral value indicating WAT is somewhat dependend on debt financing.
The Debt to Equity ratio of WAT (0.69) is worse than 72.73% of its industry peers.
Even though the debt/equity ratio score it not favorable for WAT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 2.35 | ||
| Altman-Z | 9.27 |
ROIC/WACC2
WACC10.01%
2.3 Liquidity
WAT has a Current Ratio of 1.81. This is a normal value and indicates that WAT is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.81, WAT is not doing good in the industry: 63.64% of the companies in the same industry are doing better.
A Quick Ratio of 1.28 indicates that WAT should not have too much problems paying its short term obligations.
WAT has a worse Quick ratio (1.28) than 70.91% of its industry peers.
WAT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.81 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
WAT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.84%.
The Earnings Per Share has been growing slightly by 5.53% on average over the past years.
WAT shows a small growth in Revenue. In the last year, the Revenue has grown by 2.57%.
Measured over the past years, WAT shows a small growth in Revenue. The Revenue has been growing by 4.21% on average per year.
EPS 1Y (TTM)3.84%
EPS 3Y1.89%
EPS 5Y5.53%
EPS Q2Q%1.81%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y2.02%
Revenue growth 5Y4.21%
Sales Q2Q%3.9%
3.2 Future
Based on estimates for the next years, WAT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.85% on average per year.
WAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.13% yearly.
EPS Next Y9.9%
EPS Next 2Y9.82%
EPS Next 3Y10.31%
EPS Next 5Y10.85%
Revenue Next Year5.55%
Revenue Next 2Y5.98%
Revenue Next 3Y6.15%
Revenue Next 5Y6.13%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 29.31, the valuation of WAT can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of WAT indicates a somewhat cheap valuation: WAT is cheaper than 65.45% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.15. WAT is around the same levels.
WAT is valuated rather expensively with a Price/Forward Earnings ratio of 24.38.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WAT indicates a somewhat cheap valuation: WAT is cheaper than 70.91% of the companies listed in the same industry.
WAT is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.60, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.31 | ||
| Fwd PE | 24.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WAT indicates a somewhat cheap valuation: WAT is cheaper than 70.91% of the companies listed in the same industry.
WAT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. WAT is cheaper than 65.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.54 | ||
| EV/EBITDA | 21.23 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WAT does not grow enough to justify the current Price/Earnings ratio.
WAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.96
PEG (5Y)5.3
EPS Next 2Y9.82%
EPS Next 3Y10.31%
5. Dividend
5.1 Amount
No dividends for WAT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
349.04
-3.37 (-0.96%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners98.11%
Inst Owner Change-1.75%
Ins Owners0.11%
Ins Owner Change0.6%
Market Cap20.77B
Analysts71.85
Price Target402.28 (15.25%)
Short Float %3.06%
Short Ratio3.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.5%
Min EPS beat(2)0.35%
Max EPS beat(2)0.65%
EPS beat(4)4
Avg EPS beat(4)2.71%
Min EPS beat(4)0.35%
Max EPS beat(4)8.29%
EPS beat(8)8
Avg EPS beat(8)4.19%
EPS beat(12)11
Avg EPS beat(12)2.84%
EPS beat(16)15
Avg EPS beat(16)5.28%
Revenue beat(2)2
Avg Revenue beat(2)0.43%
Min Revenue beat(2)0.06%
Max Revenue beat(2)0.8%
Revenue beat(4)4
Avg Revenue beat(4)0.97%
Min Revenue beat(4)0.06%
Max Revenue beat(4)2.8%
Revenue beat(8)4
Avg Revenue beat(8)-0.01%
Revenue beat(12)7
Avg Revenue beat(12)0.19%
Revenue beat(16)10
Avg Revenue beat(16)1.19%
PT rev (1m)-0.38%
PT rev (3m)-3.1%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-0.03%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.3%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)0.92%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)1.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.31 | ||
| Fwd PE | 24.38 | ||
| P/S | 6.96 | ||
| P/FCF | 33.54 | ||
| P/OCF | 27.37 | ||
| P/B | 10.58 | ||
| P/tB | 204.4 | ||
| EV/EBITDA | 21.23 |
EPS(TTM)11.91
EY3.41%
EPS(NY)14.31
Fwd EY4.1%
FCF(TTM)10.41
FCFY2.98%
OCF(TTM)12.75
OCFY3.65%
SpS50.13
BVpS32.98
TBVpS1.71
PEG (NY)2.96
PEG (5Y)5.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.31% | ||
| ROE | 33.48% | ||
| ROCE | 23.29% | ||
| ROIC | 20% | ||
| ROICexc | 22.36% | ||
| ROICexgc | 52.35% | ||
| OM | 28.34% | ||
| PM (TTM) | 22.02% | ||
| GM | 59.27% | ||
| FCFM | 20.76% |
ROA(3y)16.49%
ROA(5y)18.04%
ROE(3y)77%
ROE(5y)128.85%
ROIC(3y)22.94%
ROIC(5y)25.43%
ROICexc(3y)26.72%
ROICexc(5y)31.12%
ROICexgc(3y)50.26%
ROICexgc(5y)55.59%
ROCE(3y)26.72%
ROCE(5y)29.62%
ROICexcg growth 3Y-9.19%
ROICexcg growth 5Y-5.06%
ROICexc growth 3Y-18.41%
ROICexc growth 5Y-11.04%
OM growth 3Y-1.6%
OM growth 5Y-0.88%
PM growth 3Y-4.65%
PM growth 5Y-2.61%
GM growth 3Y0.51%
GM growth 5Y0.43%
F-Score6
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 2.35 | ||
| Debt/EBITDA | 1.31 | ||
| Cap/Depr | 72.44% | ||
| Cap/Sales | 4.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.08% | ||
| Profit Quality | 94.25% | ||
| Current Ratio | 1.81 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z | 9.27 |
F-Score6
WACC10.01%
ROIC/WACC2
Cap/Depr(3y)103.92%
Cap/Depr(5y)115.41%
Cap/Sales(3y)5.47%
Cap/Sales(5y)5.95%
Profit Quality(3y)75.5%
Profit Quality(5y)85.71%
High Growth Momentum
Growth
EPS 1Y (TTM)3.84%
EPS 3Y1.89%
EPS 5Y5.53%
EPS Q2Q%1.81%
EPS Next Y9.9%
EPS Next 2Y9.82%
EPS Next 3Y10.31%
EPS Next 5Y10.85%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y2.02%
Revenue growth 5Y4.21%
Sales Q2Q%3.9%
Revenue Next Year5.55%
Revenue Next 2Y5.98%
Revenue Next 3Y6.15%
Revenue Next 5Y6.13%
EBIT growth 1Y2.29%
EBIT growth 3Y0.39%
EBIT growth 5Y3.3%
EBIT Next Year21.15%
EBIT Next 3Y11.08%
EBIT Next 5Y11.57%
FCF growth 1Y45.62%
FCF growth 3Y2.29%
FCF growth 5Y5.27%
OCF growth 1Y24.3%
OCF growth 3Y0.66%
OCF growth 5Y3.45%