WAT
HealthcareWaters Corporation
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Market Data
Financials
XBRL · SEC EDGAR2008–2025(18yr)| Metric | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $1.6B | $1.5B | $1.6B | $1.9B | $1.8B | $1.9B | $2.0B | $2.0B | $2.2B | $2.3B | $2.4B | $2.4B | $2.4B | $2.8B | $3.0B | $3.0B | $3.0B | $3.2B | +7.0% |
| Gross Profit | $913.9M | $903.8M | $990.1M | $1.1B | $1.1B | $1.1B | $1.2B | $1.2B | $1.3B | $1.4B | $1.4B | $1.4B | $1.4B | $1.6B | $1.7B | $1.8B | $1.8B | $1.9B | +6.7% |
| Gross Margin | 58.0% | 60.3% | 60.2% | 60.5% | 60.0% | 58.9% | 58.5% | 58.7% | 58.9% | 59.0% | 59.0% | 58.0% | 57.4% | 58.5% | 58.0% | 59.6% | 59.4% | 59.3% | -0.1pp |
| Operating Income | $389.8M | $394.6M | $449.9M | $528.6M | $511.5M | $517.3M | $517.9M | $567.5M | $624.3M | $661.9M | $739.8M | $708.5M | $645.5M | $821.7M | $873.4M | $817.7M | $826.4M | $802.6M | -2.9% |
| Operating Margin | 24.7% | 26.3% | 27.4% | 28.6% | 27.7% | 27.2% | 26.0% | 27.8% | 28.8% | 28.7% | 30.6% | 29.4% | 27.3% | 29.5% | 29.4% | 27.7% | 27.9% | 25.4% | -2.6pp |
| Net Income | $322.5M | $323.3M | — | — | $461.4M | $450.0M | $431.6M | $469.1M | $521.5M | $20.3M | $593.8M | $592.2M | $521.6M | $692.8M | $707.8M | $642.2M | $637.8M | $642.6M | +0.8% |
| Net Margin | 20.5% | 21.6% | — | — | 25.0% | 23.6% | 21.7% | 23.0% | 24.1% | 0.9% | 24.5% | 24.6% | 22.1% | 24.9% | 23.8% | 21.7% | 21.6% | 20.3% | -1.3pp |
| Free Cash Flow | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | $442.2M | $619.6M | $539.8M | -12.9% |
| FCF Margin | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 15.0% | 20.9% | 17.1% | -3.9pp |
| EPS (Diluted) | $3.21 | $3.34 | — | — | $5.34 | $5.20 | $5.07 | $5.65 | $6.41 | $0.25 | $7.65 | $8.69 | $8.36 | $11.17 | $11.73 | $10.84 | $10.71 | $10.76 | +0.5% |
1. THE BIG PICTURE
Waters Corporation is transitioning from a specialized instrument manufacturer into a deeply integrated life sciences platform, using its proprietary software and vertical manufacturing to lock in customers. The recent acquisition of the BDS business from Becton, Dickinson and Company marks a definitive shift toward aggressive, debt-fueled expansion that tests whether its high-margin model can scale into new diagnostic segments.
2. WHERE THE RISKS HIT HARDEST
Waters Corporation’s primary competitive strength—its Vertical Integration and control over the production of resins and columns—is threatened by Substantial Indebtedness and the BDS Business Acquisition Integration. Waters Corporation assumed $4.0 billion in debt to fund the deal, creating a fixed-cost burden that could limit its ability to "react quickly to new customer requirements," a key advantage cited in its 10-K (Item 1). Furthermore, the "highly differentiated" service model, which relies on a large direct sales force, could see its effectiveness diluted if management is forced to prioritize the $200 million in promised cost synergies over service quality (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a company that is exceptionally efficient at turning revenue into profit but is currently facing a squeeze. While Waters Corporation leads its peer group with a 25.5% operating margin and a 20.3% net margin, its most recent quarterly net income actually fell to $225 million from $231 million a year prior (8-K). This divergence—growing sales but shrinking profit—is partly explained by the costs of the "multi-year instrument replacement cycle" and the initial weight of the BDS acquisition.
Revenue growth of 7% in the most recent quarter (XBRL) aligns with the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter trend, suggesting the business is maintaining its pace despite "market headwinds." However, with 69% of sales generated outside the U.S., these gains are fragile; a significant portion of the growth is subject to the volatility of the Chinese renminbi and the Euro (Risks). Short interest stands at 3.1% of the float, indicating a modest but notable bearish sentiment regarding Waters Corporation's ability to navigate this transition (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At an 18.6x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Waters Corporation is trading exactly in line with the peer median of 18.6x (Peer Benchmarking). The market is currently pricing in approximately 5.7% long-term growth (CAPM analysis). This valuation appears supported by Waters Corporation’s actual 7.0% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth and its superior net margins (20.3% vs. the 13.7%–17.1% range of its closest large-cap peers like Danaher and Agilent).
However, the margin for error is slim. If integration hurdles or currency devaluations cause long-term growth to slow to 5.0%, the justified multiple would fall to 16.3x, implying a roughly 12% downside from current levels (CAPM analysis). Investors are essentially paying a fair price for a high-quality operator, provided it can digest $4.0 billion in new debt without compromising its 25.5% operating margin.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the "decisive progress" toward the $200 million in cost synergies mentioned by the CEO fails to appear in the 2026 operating margin results (8-K).
- Constructive if the 13% growth in the Chemistry consumables segment continues to accelerate, as this high-margin recurring revenue provides the best hedge against the volatility of lumpy instrument sales (8-K).
6. BOTTOM LINE
Structural Advantage: Vertical integration in chromatography consumables combined with a "sticky" software ecosystem that creates high customer switching costs. Bottom Line: Waters Corporation is a premier margin leader, but the stock is currently a high-conviction bet on management's ability to execute a massive, debt-heavy acquisition.
1. Top 5 Material Risks
- BDS Business Acquisition Integration: Waters Corporation must successfully integrate the BDS Business to realize $200 million in cost synergies within three years and $290 million in revenue synergies within five years; failure to do so or exceeding estimated integration costs could decrease the value of Waters Corporation’s stock.
- Substantial Indebtedness: Waters Corporation assumed $4.0 billion in debt related to the BDS Business Acquisition, consisting of a $3.5 billion tranche maturing February 6, 2027, and a $500 million tranche maturing February 6, 2028, which could restrict capital allocation and increase borrowing costs.
- International Operations and Currency Risk: With 69% of 2025 net sales derived from outside the U.S., Waters Corporation is vulnerable to foreign currency exchange rate fluctuations, particularly regarding the Canadian Dollar, Euro, Japanese yen, British pound, and Chinese renminbi.
- Market Demand and Seasonality: Financial results are subject to customer demand fluctuations, with a historical pattern of increased sales in the fourth quarter as customers exhaust capital budgets; failure to forecast this demand accurately can adversely impact revenue.
- Competitive Landscape: The analytical instrument market is highly competitive, and Waters Corporation faces risks from competitors introducing more effective or less expensive products, as well as industry consolidation that could exert downward pressure on pricing.
2. Company-Specific Risks
- ERP System Transition: Waters Corporation is in the process of a multi-year implementation of a new worldwide ERP system; a significant disruption or deficiency in this transition could impair Waters Corporation’s ability to process orders, ship products, and maintain effective internal controls over financial reporting.
- Artificial Intelligence Integration: Waters Corporation is integrating AI into its operations and products; premature use of inadequate AI or flawed algorithms could result in regulatory penalties, legal liability, or the loss of intellectual property and trade secrets.
- Singapore Tax Incentive: Waters Corporation benefits from a 5% concessionary income tax rate in Singapore through March 31, 2026; failure to meet milestone targets would result in the reversal of previously recognized benefits and the application of a 17% statutory tax rate on income earned since April 1, 2021.
- Workforce Reductions: Following a 5% worldwide workforce reduction in 2024 and 2023, Waters Corporation faces risks that these measures could adversely affect productivity, morale, and innovation capabilities, potentially hindering the execution of strategic plans.
3. Regulatory/Legal Risks
- Tax Matters Agreement: Waters Corporation is subject to restrictions under the Tax Matters Agreement for two years following the SpinCo Cash Distribution; actions causing the spin-off to become taxable could result in material tax liabilities.
- Government Contract Compliance: Waters Corporation derives revenue from U.S. and foreign government contracts; failure to comply with specific regulations governing these contracts could lead to suspension, debarment, or criminal and civil penalties.
- Data Privacy Regulations: Waters Corporation is subject to evolving global data privacy laws (e.g., in the U.S., E.U., and U.K.); violations could result in significant fines, such as those based on a percentage of global revenues under E.U. regulations.
- Exclusive Forum Provisions: Waters Corporation’s bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain shareholder actions, which may limit shareholders' ability to choose a preferred judicial forum and increase litigation costs.
4. Financial Impact Map
BDS Business Acquisition Integration → Future Earnings and Cash Flows → Potential failure to realize $490 million in combined synergies. Substantial Indebtedness → Operational Flexibility and Interest Expense → $4.0 billion in assumed debt requires principal and interest payments. International Operations → Net Sales and Operating Income → 69% of 2025 net sales are subject to foreign currency and geopolitical risk. Market Demand/Seasonality → Revenue and Operating Results → Fourth-quarter concentration of capital goods spending creates forecasting risk. Competitive Landscape → Sales and Profitability → Potential for decreased sales due to more effective or less expensive competitor products.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Waters Corp projects 6.25% organic growth for 2026, warns of Q1 China headwinds
- ▸Anticipates 6.25% organic growth in core business for 2026
- ▸Projects 2.5%-3% revenue decline in Q1 due to China DRG headwinds
- ▸Bioseparations now account for over 70% of total R&D spending
- ▸Focusing on integration of BD Diagnostic Solutions acquisition
- ▸Expects normalized LC-MS replacement cycle to drive growth by 2027
Waters Prices $3.5 Billion Senior Notes Offering Across Multi-Tranche Issuance
- ▸Priced $3.5 billion senior notes offering via subsidiary Augusta SpinCo
- ▸Interest rates range from 4.321% to 5.245%
- ▸Maturities span from 2027 to 2036
- ▸Proceeds earmarked to repay existing delayed draw term loan debt
- ▸Barclays serving as global coordinator for the transaction
Waters Corp Q4 Revenue $932M +7% YoY, EPS $4.53, Shares Lag Dow
- ▸Q4 revenue $932M, up 7% YoY
- ▸Q4 adjusted EPS $4.53, up 10% YoY
- ▸Q1 2026 adjusted EPS guidance $2.25–$2.35
- ▸Stock down 22.3% YTD, trading 28.8% below 52-week high
- ▸Becton Dickinson biosciences unit acquisition facing integration and performance risks
Waters Prices $3.5 Billion Senior Notes Offering to Repay Existing Debt
- ▸Priced $3.5B aggregate principal amount of senior notes
- ▸Notes include five tranches maturing between 2027 and 2036
- ▸Coupon rates range from 4.321% to 5.245%
- ▸Proceeds to repay $3.5B in existing term loan indebtedness
- ▸Offering expected to close on or about March 23, 2026
Waters Prices $3.5 Billion Senior Notes Offering to Repay Existing Indebtedness
- ▸Priced $3.5B aggregate principal amount of senior notes
- ▸Notes include five tranches maturing between 2027 and 2036
- ▸Coupon rates range from 4.321% to 5.245%
- ▸Proceeds to repay $3.5B in outstanding term loan debt
- ▸Offering expected to close on or about March 23, 2026
Waters Corp Q4 revenue $932.4M down 45.4% YoY, misses next quarter EPS guidance
- ▸Q4 revenue $932.4M, down 45.4% YoY
- ▸Revenue result met analyst consensus estimates
- ▸Next quarter revenue guidance exceeds analyst expectations
- ▸Next quarter EPS guidance significantly missed analyst estimates
- ▸Stock price down 24.8% since earnings release
Waters Launches ARES-G3 Rheometer, Boosting Testing Speed by 80% for Analytical Workflows
- ▸ARES-G3 Rheometer launched under TA Instruments line
- ▸Testing speed increased by up to 80%
- ▸System captures 25,000 data points per second
- ▸FY2025 net sales $3.17B, earnings $642.63M
- ▸Projected 2028 revenue $3.7B with $946.3M earnings
Waters Q4 EPS $4.53 beats estimates, revenue $932.4M rises 7% YoY
- ▸Q4 non-GAAP EPS $4.53, beat estimates by 0.67%, +10.5% YoY
- ▸Net sales $932.4M, beat estimates by 0.55%, +7% YoY
- ▸Recurring revenue (Services and Chemistry) $499.5M, +10% YoY
- ▸Pharmaceutical market sales $540.6M, +8% YoY
- ▸Adjusted operating margin 35.2%, contracted 20 bps YoY