WAT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 58 industry peers in the Life Sciences Tools & Services industry. WAT gets an excellent profitability rating and is at the same time showing great financial health properties. WAT has a decent growth rate and is not valued too expensively. These ratings could make WAT a good candidate for quality investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year WAT was profitable.
In the past year WAT had a positive cash flow from operations.
WAT had positive earnings in each of the past 5 years.
In the past 5 years WAT always reported a positive cash flow from operatings.

1.2 Ratios

WAT's Return On Assets of 13.34% is amongst the best of the industry. WAT outperforms 94.74% of its industry peers.
WAT has a better Return On Equity (27.84%) than 92.98% of its industry peers.
The Return On Invested Capital of WAT (19.60%) is better than 92.98% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WAT is significantly above the industry average of 13.29%.

		Industry Rank	Sector Rank
ROA	13.34%
ROE	27.84%
ROIC	19.6%

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

WAT's Profit Margin of 20.89% is amongst the best of the industry. WAT outperforms 96.49% of its industry peers.
In the last couple of years the Profit Margin of WAT has declined.
WAT's Operating Margin of 26.54% is amongst the best of the industry. WAT outperforms 94.74% 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 58.96% is fine compared to the rest of the industry. WAT outperforms 75.44% 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	26.54%
PM (TTM)	20.89%
GM	58.96%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), WAT is creating value.
WAT has more shares outstanding than it did 1 year ago.
WAT has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WAT has been reduced compared to a year ago.

2.2 Solvency

WAT has an Altman-Z score of 9.84. This indicates that WAT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of WAT (9.84) is better than 89.47% of its industry peers.
The Debt to FCF ratio of WAT is 2.34, which is a good value as it means it would take WAT, 2.34 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.34, WAT belongs to the top of the industry, outperforming 85.96% of the companies in the same industry.
A Debt/Equity ratio of 0.41 indicates that WAT is not too dependend on debt financing.
WAT has a Debt to Equity ratio of 0.41. This is comparable to the rest of the industry: WAT outperforms 42.11% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.41
Debt/FCF	2.34
Altman-Z	9.84

ROIC/WACC1.78

WACC11%

2.3 Liquidity

WAT has a Current Ratio of 1.53. This is a normal value and indicates that WAT is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of WAT (1.53) is worse than 70.18% of its industry peers.
A Quick Ratio of 1.08 indicates that WAT should not have too much problems paying its short term obligations.
WAT's Quick ratio of 1.08 is on the low side compared to the rest of the industry. WAT is outperformed by 75.44% 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	1.53
Quick Ratio	1.08

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 11.50% over the past year.
Measured over the past 5 years, WAT shows a small growth in Earnings Per Share. The EPS has been growing by 5.53% on average per year.
Looking at the last year, WAT shows a small growth in Revenue. The Revenue has grown by 6.90% in the last year.
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)11.5%

EPS 3Y1.89%

EPS 5Y5.53%

EPS Q2Q%16.04%

Revenue 1Y (TTM)6.9%

Revenue growth 3Y2.02%

Revenue growth 5Y4.21%

Sales Q2Q%8.05%

3.2 Future

The Earnings Per Share is expected to grow by 10.30% on average over the next years. This is quite good.
WAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.59% yearly.

EPS Next Y11.55%

EPS Next 2Y10.34%

EPS Next 3Y10.3%

EPS Next 5Y10.3%

Revenue Next Year7.43%

Revenue Next 2Y6.88%

Revenue Next 3Y6.7%

Revenue Next 5Y6.59%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 30.89, WAT can be considered very expensive at the moment.
Based on the Price/Earnings ratio, WAT is valued a bit cheaper than 70.18% of the companies in the same industry.
WAT's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
With a Price/Forward Earnings ratio of 27.15, WAT can be considered very expensive at the moment.
75.44% of the companies in the same industry are more expensive than WAT, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 25.98. WAT is around the same levels.

		Industry Rank	Sector Rank
PE	30.89
Fwd PE	27.15

4.2 Price Multiples

68.42% of the companies in the same industry are more expensive than WAT, based on the Enterprise Value to EBITDA ratio.
68.42% of the companies in the same industry are more expensive than WAT, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	38.78
EV/EBITDA	23.67

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.
The excellent profitability rating of WAT may justify a higher PE ratio.