WATERS CORP (WAT) Stock Fundamental Analysis
NYSE:WAT - New York Stock Exchange, Inc. - US9418481035 - Common Stock - Currency: USD
WAT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 56 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 correct valuation and a medium growth rate. This makes WAT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
WAT had positive earnings in the past year.
WAT had a positive operating cash flow in the past year.
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
WAT's Return On Assets of 14.31% is amongst the best of the industry. WAT outperforms 94.64% of its industry peers.
Looking at the Return On Equity, with a value of 33.48%, WAT belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
The Return On Invested Capital of WAT (20.00%) is better than 94.64% 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 12.97%.
| 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
WAT has a Profit Margin of 22.02%. This is amongst the best in the industry. WAT outperforms 98.21% of its industry peers.
WAT's Profit Margin has declined in the last couple of years.
The Operating Margin of WAT (28.34%) is better than 98.21% of its industry peers.
In the last couple of years the Operating Margin of WAT has remained more or less at the same level.
Looking at the Gross Margin, with a value of 59.27%, WAT is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
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
The debt/assets ratio for WAT has been reduced compared to a year ago.
2.2 Solvency
WAT has an Altman-Z score of 9.40. This indicates that WAT is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.40, WAT belongs to the best of the industry, outperforming 92.86% 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 has a better Debt to FCF ratio (2.35) than 85.71% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that WAT is somewhat dependend on debt financing.
WAT has a worse Debt to Equity ratio (0.69) than 73.21% 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 | 9.4 |
ROIC/WACC1.89
WACC10.57%
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: 66.07% 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's Quick ratio of 1.28 is on the low side compared to the rest of the industry. WAT is outperformed by 69.64% of its industry peers.
The current and quick ratio evaluation for WAT is rather negative, while it does have 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
The Earnings Per Share has been growing slightly by 3.84% over the past year.
WAT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.53% yearly.
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
The Earnings Per Share is expected to grow by 10.51% 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 5.95% yearly.
EPS Next Y9.86%
EPS Next 2Y9.91%
EPS Next 3Y10.26%
EPS Next 5Y10.51%
Revenue Next Year5.58%
Revenue Next 2Y6.01%
Revenue Next 3Y6.17%
Revenue Next 5Y5.95%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 29.17, the valuation of WAT can be described as expensive.
WAT's Price/Earnings ratio is a bit cheaper when compared to the industry. WAT is cheaper than 62.50% of the companies in the same industry.
When comparing the Price/Earnings ratio of WAT to the average of the S&P500 Index (26.03), we can say WAT is valued inline with the index average.
A Price/Forward Earnings ratio of 24.22 indicates a rather expensive valuation of WAT.
WAT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. WAT is cheaper than 69.64% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WAT to the average of the S&P500 Index (21.94), we can say WAT is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.17 | ||
| Fwd PE | 24.22 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WAT is valued a bit cheaper than 69.64% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WAT is valued a bit cheaper than the industry average as 64.29% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.38 | ||
| EV/EBITDA | 21.79 |
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.
PEG (NY)2.96
PEG (5Y)5.28
EPS Next 2Y9.91%
EPS Next 3Y10.26%
5. Dividend
5.1 Amount
No dividends for WAT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
347.36
-14.74 (-4.07%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners96.92%
Inst Owner Change-1.79%
Ins Owners0.05%
Ins Owner Change0.6%
Market Cap20.67B
Analysts71.85
Price Target403.8 (16.25%)
Short Float %2.68%
Short Ratio2.83
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)-3.12%
PT rev (3m)0.65%
EPS NQ rev (1m)0.23%
EPS NQ rev (3m)0.2%
EPS NY rev (1m)0.38%
EPS NY rev (3m)0.5%
Revenue NQ rev (1m)0.94%
Revenue NQ rev (3m)0.88%
Revenue NY rev (1m)1.06%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.17 | ||
| Fwd PE | 24.22 | ||
| P/S | 6.93 | ||
| P/FCF | 33.38 | ||
| P/OCF | 27.24 | ||
| P/B | 10.53 | ||
| P/tB | 203.38 | ||
| EV/EBITDA | 21.79 |
EPS(TTM)11.91
EY3.43%
EPS(NY)14.34
Fwd EY4.13%
FCF(TTM)10.41
FCFY3%
OCF(TTM)12.75
OCFY3.67%
SpS50.14
BVpS32.98
TBVpS1.71
PEG (NY)2.96
PEG (5Y)5.28
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 | 9.4 |
F-Score6
WACC10.57%
ROIC/WACC1.89
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 Y9.86%
EPS Next 2Y9.91%
EPS Next 3Y10.26%
EPS Next 5Y10.51%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y2.02%
Revenue growth 5Y4.21%
Sales Q2Q%3.9%
Revenue Next Year5.58%
Revenue Next 2Y6.01%
Revenue Next 3Y6.17%
Revenue Next 5Y5.95%
EBIT growth 1Y2.29%
EBIT growth 3Y0.39%
EBIT growth 5Y3.3%
EBIT Next Year22.9%
EBIT Next 3Y12.34%
EBIT Next 5Y11.2%
FCF growth 1Y45.62%
FCF growth 3Y2.29%
FCF growth 5Y5.27%
OCF growth 1Y24.3%
OCF growth 3Y0.66%
OCF growth 5Y3.45%