Overall WAT gets a fundamental rating of 6 out of 10. We evaluated WAT against 57 industry peers in the Life Sciences Tools & Services industry. WAT has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. WAT is not valued too expensively and it also shows a decent growth rate. This makes WAT very considerable 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.
In the past 5 years WAT has always been profitable.
In the past 5 years WAT always reported a positive cash flow from operatings.

1.2 Ratios

WAT has a Return On Assets of 13.34%. This is amongst the best in the industry. WAT outperforms 94.74% of its industry peers.
Looking at the Return On Equity, with a value of 27.84%, WAT belongs to the top of the industry, outperforming 92.98% of the companies in the same industry.
WAT's Return On Invested Capital of 19.60% is amongst the best of the industry. WAT outperforms 92.98% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WAT is significantly above the industry average of 13.75%.

		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

The Profit Margin of WAT (20.89%) is better than 96.49% of its industry peers.
In the last couple of years the Profit Margin of WAT has declined.
Looking at the Operating Margin, with a value of 26.54%, WAT belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
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.
WAT's Gross Margin has been stable in the last couple of years.

		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.
Compared to 1 year ago, WAT has more shares outstanding
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 9.95. This indicates that WAT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of WAT (9.95) is better than 89.47% of its industry peers.
WAT has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as WAT would need 2.34 years to pay back of all of its debts.
WAT has a Debt to FCF ratio of 2.34. This is amongst the best in the industry. WAT outperforms 85.96% of its industry peers.
WAT has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
WAT has a Debt to Equity ratio (0.41) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0.41
Debt/FCF	2.34
Altman-Z	9.95

ROIC/WACC1.78

WACC11%

2.3 Liquidity

A Current Ratio of 1.53 indicates that WAT should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.53, WAT is doing worse than 70.18% of the companies in the same industry.
WAT has a Quick Ratio of 1.08. 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 Quick ratio value of 1.08, WAT is not doing good in the industry: 75.44% of the companies in the same industry are doing better.
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	1.53
Quick Ratio	1.08

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

WAT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.50%, which is quite good.
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 6.90%.
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.
Based on estimates for the next years, WAT will show a small growth in Revenue. The Revenue will grow by 6.59% on average per year.

EPS Next Y11.59%

EPS Next 2Y10.26%

EPS Next 3Y10.23%

EPS Next 5Y10.3%

Revenue Next Year7.4%

Revenue Next 2Y6.85%

Revenue Next 3Y6.67%

Revenue Next 5Y6.59%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 30.89, the valuation of WAT can be described as expensive.
Based on the Price/Earnings ratio, WAT is valued a bit cheaper than the industry average as 70.18% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.21, WAT is valued at the same level.
Based on the Price/Forward Earnings ratio of 27.19, the valuation of WAT can be described as expensive.
Based on the Price/Forward Earnings ratio, WAT is valued a bit cheaper than 75.44% of the companies in the same industry.
WAT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	30.89
Fwd PE	27.19

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, WAT is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, WAT is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	38.78
EV/EBITDA	24.14

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WAT has an outstanding profitability rating, which may justify a higher PE ratio.