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1. Company Snapshot

1.a. Company Description

Waters Corporation, a specialty measurement company, provides analytical workflow solutions in Asia, the Americas, and Europe.It operates through two segments, Waters and TA.The company designs, manufactures, sells, and services high and ultra-performance liquid chromatography, as well as mass spectrometry (MS) technology systems and support products, including chromatography columns, other consumable products, and post-warranty service plans.


It also designs, manufactures, sells, and services thermal analysis, rheometry, and calorimetry instruments; and develops and supplies software-based products that interface with its instruments, as well as other manufacturers' instruments.Its MS technology instruments are used in drug discovery and development comprising clinical trial testing, the analysis of proteins in disease processes, nutritional safety analysis, and environmental testing.The company offers thermal analysis, rheometry, and calorimetry instruments for use in predicting the suitability and stability of fine chemicals, pharmaceuticals, water, polymers, metals, and viscous liquids for various industrial, consumer good, and healthcare products, as well as for life science research.


Its products are used by life science, pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic, and governmental customers working in research and development, quality assurance, and other laboratory applications.Waters Corporation was founded in 1958 and is headquartered in Milford, Massachusetts.

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1.b. Last Insights on WAT

Waters Corporation's recent performance faced negative drivers, including reduced holdings by several institutional investors. Envestnet Asset Management Inc. lowered its position by 11.6%, selling 14,656 shares, while New York State Common Retirement Fund decreased its holdings by 18.2%, selling 8,878 shares. American Century Companies Inc. also trimmed its stake by 28.9%. Despite beating Q4 earnings and revenue estimates with $4.53 per share, the company's growth may be impacted by these reduced investments. Additionally, the company reported a 7% growth in sales for Q4 2025.

1.c. Company Highlights

2. Waters Corporation's Strong Q4 2025 Earnings Driven by High Single-Digit Growth Across Pharma and Industrial End Markets

Waters Corporation delivered a strong finish to 2025, achieving 7% reported revenue growth and low double-digit adjusted EPS growth in Q4. Sales grew 7% on a reported basis and 6% in constant currency, driven by high single-digit growth across pharma and industrial end markets. Adjusted EPS grew to $4.53, while GAAP EPS was $3.77. For the full year, sales grew 7%, with recurring revenue up 8% and instrument revenue up 5%. The company's adjusted EPS for 2025 was $13.13, slightly ahead of estimates. The acquisition of BD's Biosciences and Diagnostic Solutions business has strengthened its position in high-growth adjacencies, with the integration plan on track.

Publication Date: Feb -15

📋 Highlights
  • Strong 2025 Revenue & EPS Growth:: Waters achieved 7% reported revenue growth ($932M in Q4) and low double-digit adjusted EPS growth ($4.53 in Q4, $13.13 full-year), driven by pharma and industrial markets.
  • BD Acquisition Synergies:: Expected $55M cost synergies and $50M revenue synergies in 2026, boosting margins to 28.1% and pro forma revenue to $6.405–$6.455B (5.3% YoY growth).
  • 5 High-Growth Adjacencies:: GLP-1s, PFAS, India generics, biologics, and informatics projected to add >200 bps annual revenue growth to 2030.
  • 2026 Guidance:: Organic growth of 5.5–7%, with adjusted EPS of $14.30–$14.50 (+8.9–10.4% YoY) and Q1 revenue of $718–$731M (7–9% growth).
  • Pricing & Margin Expansion:: Chemistry revenue rose 12% in 2025 via pricing, with 200 bps pricing growth expected. BD acquisition to add 22.4% operating margin, driving pro forma leverage to ~2.4x net debt/EBITDA.

Revenue Growth and Margin Expansion

The company's chemistry revenue grew 12% in 2025, driven by innovative products and price. Pricing improvements are expected to continue, with 200 basis points of like-for-like SKU pricing growth. The acquired assets' growth is conservative due to headwinds from China DRG and slowness in academic and government markets. For 2026, Waters guides for $7.43-$7.63 EPS, with revenue growth of 5-6%. The combined company's 2026 revenue is expected to be $6.405 billion to $6.455 billion, implying a blended year-over-year revenue growth of approximately 5.3%.

Acquisition and Synergies

The BD acquisition is expected to add 22.4% operating margin, contributing to a pro forma company margin of 28.1%. The company targets $55 million in cost synergies and $50 million in revenue synergies for 2026, yielding 100 basis points of margin expansion. The pro forma leverage for Waters is expected to be around 2.4x net debt-to-EBITDA, with plans to be below 2x within 18 months.

Valuation and Growth Expectations

With a P/E Ratio of 29.96 and an EV/EBITDA of 19.24, the market is pricing in a certain level of growth for Waters Corporation. Analysts estimate next year's revenue growth at 8.4%, which is slightly higher than the company's guidance. The actual EPS of $4.53 was slightly ahead of estimates at $4.5, indicating a positive surprise. The company's ROE of 28.52% and ROIC of 15.08% indicate a strong return on equity and invested capital, respectively.

3. NewsRoom

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Waters Introduces Next-Generation Microflow LC Columns with MaxPeak Premier Technology, Delivering Higher Sensitivity with Lower Sample and Solvent Usage

Feb -17

Source: prnewswire.com

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Waters Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

Feb -13

Source: zacks.com

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Down 19.0% in 4 Weeks, Here's Why Waters (WAT) Looks Ripe for a Turnaround

Feb -13

Source: zacks.com

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Envestnet Asset Management Inc. Reduces Holdings in Waters Corporation $WAT

Feb -12

Source: defenseworld.net

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BD Merges Biosciences & Diagnostics Business With Waters

Feb -11

Source: zacks.com

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Waters Corp (WAT) Q4 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic Acquisitions

Feb -09

Source: gurufocus.com

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Tech Rebound Propels Dow to New Heights

Feb -09

Source: schaeffersresearch.com

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Waters Corporation (WAT) Q4 2025 Earnings Call Transcript

Feb -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.39%)

6. Segments

Waters Instrument Systems

Expected Growth: 4.5%

Waters Instrument Systems' 4.5% growth driven by increasing adoption of liquid chromatography and mass spectrometry in pharmaceutical and biotechnology industries, expansion in emerging markets, and growing demand for analytical instruments in food safety and environmental testing.

Waters Service

Expected Growth: 4.2%

Waters Service segment's 4.2% growth is driven by increasing demand for laboratory testing and analytical services, particularly in the pharmaceutical and biotechnology industries. Additionally, the company's strategic investments in digitalization and customer experience enhancements have improved service delivery and retention, contributing to the segment's growth.

Chemistry Consumables

Expected Growth: 4.8%

The 4.8% growth of Chemistry Consumables from Waters Corporation is driven by increasing adoption of liquid chromatography and mass spectrometry in pharmaceutical and biotechnology industries, rising demand for high-quality analytical instruments, and growing need for research and development in life sciences.

TA Instrument Systems

Expected Growth: 4.0%

TA Instrument Systems from Waters Corporation's 4.0% growth is driven by increasing adoption in biopharmaceutical and biomedical research, growing demand for high-performance liquid chromatography (HPLC) and ultra-performance liquid chromatography (UPLC) systems, and expansion into emerging markets, particularly in Asia.

TA Service

Expected Growth: 3.8%

The 3.8% growth of TA Service from Waters Corporation is driven by increasing adoption of liquid chromatography and mass spectrometry in biopharmaceutical and clinical research, coupled with growing demand for analytical services in the pharmaceutical industry, as well as expansion into emerging markets and strategic partnerships.

7. Detailed Products

Liquid Chromatography (LC) Systems

Waters Corporation offers a range of liquid chromatography systems for analytical and preparative separations, including HPLC, UHPLC, and SFC systems.

Mass Spectrometry (MS) Systems

Waters Corporation provides a range of mass spectrometry systems, including quadrupole, time-of-flight, and tandem quadrupole systems, for qualitative and quantitative analysis.

Gas Chromatography (GC) Systems

Waters Corporation offers a range of gas chromatography systems for analytical and preparative separations, including GC, GC-MS, and Headspace GC systems.

Sample Preparation and Handling

Waters Corporation provides a range of sample preparation and handling solutions, including automated sample preparation systems, vials, and consumables.

Informatics and Software

Waters Corporation offers a range of informatics and software solutions, including MassLynx, Empower, and UNIFI, for data acquisition, processing, and analysis.

Columns and Consumables

Waters Corporation provides a range of columns and consumables, including HPLC columns, GC columns, and sample preparation consumables.

8. Waters Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Waters Corporation operates in a niche market with high barriers to entry, reducing the threat of substitutes.

Bargaining Power Of Customers

Waters Corporation's customers are largely dependent on the company's products and services, giving them limited bargaining power.

Bargaining Power Of Suppliers

Waters Corporation has a diverse supplier base, but some suppliers have significant bargaining power due to their size and market presence.

Threat Of New Entrants

The high barriers to entry in the analytical instruments industry, including significant capital expenditures and regulatory hurdles, reduce the threat of new entrants.

Intensity Of Rivalry

The analytical instruments industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 67.45%
Debt Cost 4.81%
Equity Weight 32.55%
Equity Cost 8.79%
WACC 6.11%
Leverage 207.19%

11. Quality Control: Waters Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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LabCorp

A-Score: 5.4/10

Value: 4.6

Growth: 4.3

Quality: 5.4

Yield: 2.0

Momentum: 7.0

Volatility: 9.3

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Medpace

A-Score: 5.0/10

Value: 1.3

Growth: 9.3

Quality: 7.9

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

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Natera

A-Score: 4.7/10

Value: 4.0

Growth: 7.0

Quality: 3.6

Yield: 0.0

Momentum: 8.5

Volatility: 5.0

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Waters

A-Score: 4.4/10

Value: 1.0

Growth: 5.2

Quality: 7.7

Yield: 0.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

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Twist Bioscience

A-Score: 3.8/10

Value: 6.8

Growth: 7.1

Quality: 4.6

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Charles River Laboratories

A-Score: 3.3/10

Value: 4.6

Growth: 4.1

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

333.33$

Current Price

333.33$

Potential

-0.00%

Expected Cash-Flows