# Waters (WAT.US)

Canonical: https://gigainvestors.com/s/WAT

Analysis as of: 2026-10-16T07:33:01.568Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $444.15 per share; close as of 2026-10-15.

Estimated value: low $158.04 per share, central $219.97 per share, high $257.38 per share. Buy at or below the central value $219.97 per share. Valuation as of 2026-10-16T07:33:01.568Z; scenarios are not confidence intervals.

Expected annual return: 6.5% at the stated quote. About 6.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.03×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.29×

- FY2017: 0.29×

- FY2018: 0.31×

- FY2019: 0.29×

- FY2020: 0.27×

- FY2021: 0.29×

- FY2022: 0.29×

- FY2023: 0.28×

- FY2024: 0.28×

- FY2025: 0.28×

### moat: pass

- ROIC, median of available years: 57.5%

- ROIC, second-lowest year: 35.8%

- Typical minus recent gross margin: 0.9 pp

- Typical gross margin (annual median): 58.7%

- Recent gross margin (lower of latest and 3-year median): 57.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.4%

- ROIC including acquisitions, ten-year median: 29.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 56.3%

- FY2017: 90.0%

- FY2018: >100%

- FY2019: 26.3%

- FY2020: 75.6%

- FY2021: 78.3%

- FY2022: 58.7%

- FY2023: 37.7%

- FY2024: 36.6%

- FY2025: 35.8%

### economics: pass

- Owner earnings / net income, 5-yr: 1.04×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.5B

- Net income, five-year total: $3.3B

- Return on incremental invested capital: 39.3%

- Working capital / revenue, annual change: 0.9 pp

- Working capital / revenue, change between three-year averages: 6.9 pp

- Working capital / revenue, final three-year average: 39.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.97×

- FY2023: 1.01×

- FY2024: 1.08×

- FY2025: 1.15×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 90.0% vs 36.6%

- Per-share earnings: 5.65 to 10.76 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -3.3%

- Ordinary dilution, 5-year annual growth: -0.9%

- Market cap gain: $12B

- Cumulative retained earnings: $5.0B

- Diluted shares, 10-year annual growth: -3.3%

- Diluted shares, 5-year annual growth: -0.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 8.4%

- Per-share value change: $5.12

- Per-share value, starting three-year median: $5.65

- Per-share value, ending three-year median: $10.76

- Buybacks concentrated in cheaper years (correlation): 0.72

- Average buyback yield: 3.9%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $1.5B

- Cumulative net income, 10 years: $5.6B

- ROIC, first three-year median: 90.0%

- ROIC, last three-year median: 36.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: $6.41

- FY2017: $0.25

- FY2018: $7.65

- FY2019: $8.69

- FY2020: $8.36

- FY2021: $11.17

- FY2022: $11.73

- FY2023: $10.84

- FY2024: $10.71

- FY2025: $10.76

### accounting: pass

- Sloan accruals: -0.2%

- Receivables to sales index (DSRI): 1.06×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 8.3%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.02×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.74×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.3%

- FY2017: -12.7%

- FY2018: -0.3%

- FY2019: -2.0%

- FY2020: -9.5%

- FY2021: -1.8%

- FY2022: 2.9%

- FY2023: 0.9%

- FY2024: -2.7%

- FY2025: -0.2%

## Holders

- [Nicolai Tangen](https://gigainvestors.com/AKO): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Terry Smith](https://gigainvestors.com/FS): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Allen Bond](https://gigainvestors.com/JIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andreas Halvorsen](https://gigainvestors.com/vg): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 15.5% a year for ten years · "WAT Q1 Earnings Beat Estimates, BD Acquisition Aids Revenues" (finance.yahoo.com, May 2026) · sales +7%

Story as of 2026-10-16T09:59:50.600Z; price observation 2026-10-15.

Price needs cash profits to grow 15.5% a year for ten years

- 2025-08-04: Waters stock surges 3% as strong pharma demand drives Q2 earnings beat ([investing.com](https://www.investing.com/news/earnings/waters-stock-surges-3-as-strong-pharma-demand-drives-q2-earnings-beat-93CH-4167481))

- 2025-11-04: Waters Corp raises annual profit forecast on stronger lab equipment demand ([finance.yahoo.com](https://finance.yahoo.com/news/waters-corp-raises-annual-profit-123302114.html))

- 2026-05-07: WAT Q1 Earnings Beat Estimates, BD Acquisition Aids Revenues ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/wat-q1-earnings-beat-estimates-173400627.html))

- 2026-08-05: Waters Q2 Earnings Beat Estimates, 2026 Revenue Growth View Raised ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/waters-q2-earnings-beat-estimates-174700393.html))

- 2026-09-04: Leadership Shift And Upgraded Outlook Could Be A Game Changer For Waters (WAT) ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/leadership-shift-upgraded-outlook-could-002018374.html))

### Sales · FY2024–2025

sales +7%; source https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm; observed 2026-02-23.

- FY2016: $2.2B 

- FY2017: $2.3B 

- FY2018: $2.4B 

- FY2019: $2.4B 

- FY2020: $2.4B 

- FY2021: $2.8B 

- FY2022: $3.0B 

- FY2023: $3.0B 

- FY2024: $3.0B 

- FY2025: $3.2B 

### Gross margin · FY2025

gross margin 57.8%; source https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm; observed 2026-02-23.

- FY2016: 58.9% 

- FY2017: 59.0% 

- FY2018: 59.0% 

- FY2019: 58.0% 

- FY2020: 57.4% 

- FY2021: 58.5% 

- FY2022: 58.0% 

- FY2023: 59.6% 

- FY2024: 59.4% 

- FY2025: 57.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in diagnostics & research; annual sales are USD 3.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); FY2025: revenue 3165286000; grossProfit 1828673000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WAT.US: Waters Corporation provides analytical workflow solutions in Asia, the Americas, and Europe. The company operates through two segments, Waters and TA. The company designs, manufactures, sells, and services liquid chromatography, as well as mass spectrometry (MS) technology systems and supports products, including chromatography columns, and other consumable products. It also designs, manufactures, sells, and services 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 goods, and healthcare products, as well as for life science research; and develops and supplies software-based products that interface with its instruments, as well as other manufacturers' instruments. In addition, the company offers MS technology, which is used in drug discovery and development comprising clinical trial testing, the analysis of proteins in disease processes, nutritional safety analysis, and environmental testing. Its products are used by clinical, pharmaceutical, biochemical, industrial, nutritional safety, environmental, academic, and governmental customers working in research and development, quality assurance, and other laboratory applications. The company was founded in 1958 and is headquartered in Milford, Massachusetts.

### Why customers stay

Margins ranged from 57.8% to 59.6% during 2023–25; it earns 57.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: grossProfit / revenue = 59.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: grossProfit / revenue = 59.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); FY2025: grossProfit / revenue = 57.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); 10-year return on capital observations [[2016,0.563388640591092],[2017,0.9003993372967228],[2018,1.0307120755110517],[2019,0.2629572868644549],[2020,0.7560409455139633],[2021,0.7827437382333793],[2022,0.5873218923200453],[2023,0.37715454961644945],[2024,0.36561186568516013],[2025,0.35793510468672235]]; median 0.5753552664555686. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 58% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); Gross margin observations: [[2021,0.5848581091607158],[2022,0.5800132976396689],[2023,0.5957189380655497]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 5 of 10 years; bought back USD 14.7 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2016: growth capex 0; upkeep 94967000; owner earnings 522985000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2017: growth capex 0; upkeep 90473000; owner earnings 35840000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2018: growth capex 17147565.748886764; upkeep 110417434.25111324; owner earnings 591784565.7488868. Growth capex / owner earnings = 0.028976027327084812.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2019: growth capex 0; upkeep 163823000; owner earnings 533671000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2020: growth capex 0; upkeep 172384000; owner earnings 474548000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2021: growth capex 36586000; upkeep 131680000; owner earnings 692843000. Growth capex / owner earnings = 0.05280561397026455.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2022: growth capex 35196477.29278478; upkeep 148259522.70721522; owner earnings 689918477.2927848. Growth capex / owner earnings = 0.05101541479349051.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: growth capex 0; upkeep 160632000; owner earnings 647507000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: growth capex 0; upkeep 142481000; owner earnings 687178000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); FY2025: growth capex 0; upkeep 112745000; owner earnings 736121000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,53715000],[2020,66033000],[2021,55643000],[2022,42801000],[2023,1559200000],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); FY2025: cash repurchases 14667000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WAT.US SharesStats.PercentInsiders = 0.104 percentage points; cache date 2026-10-16.

### What could break it

Litigation Provisions The Company recorded $12 million of patent litigation settlement provisions and related costs in 2024.

- Source: https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm (filed 2026-02-23); The increase in purchased intangible amortization of $15 million in 2024 can be attributed to the timing of the Wyatt acquisition in May of 2023 as 2024 includes a full year of the amortization from the Wyatt acquisition intangible assets. Litigation Provisions The Company recorded $12 million of patent litigation settlement provisions and related costs in 2024. No litigation provisions were recorded by the Company in 2025.

### What the price says

The price assumes cash profits grow 15.5% yearly over ten years; actual growth was 8.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Ten-year compound average after fade. Initial solved rate 0.284901586497159. Price 444.15; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 5.587004321872336 → FY2025 12.329095903259304. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $139.14 per share

- 2016-11: $134.57 per share

- 2016-12: $134.39 per share

- 2017-01: $141.65 per share

- 2017-02: $154.99 per share

- 2017-03: $156.31 per share

- 2017-04: $169.89 per share

- 2017-05: $179.62 per share

- 2017-06: $183.84 per share

- 2017-07: $173.44 per share

- 2017-08: $183.48 per share

- 2017-09: $179.52 per share

- 2017-10: $196.05 per share

- 2017-11: $197.17 per share

- 2017-12: $193.19 per share

- 2018-01: $215.61 per share

- 2018-02: $204.64 per share

- 2018-03: $198.65 per share

- 2018-04: $188.41 per share

- 2018-05: $192.62 per share

- 2018-06: $193.59 per share

- 2018-07: $197.27 per share

- 2018-08: $189.48 per share

- 2018-09: $194.68 per share

- 2018-10: $189.69 per share

- 2018-11: $198.58 per share

- 2018-12: $188.65 per share

- 2019-01: $231.22 per share

- 2019-02: $242.22 per share

- 2019-03: $251.71 per share

- 2019-04: $213.54 per share

- 2019-05: $200.71 per share

- 2019-06: $215.24 per share

- 2019-07: $210.56 per share

- 2019-08: $211.89 per share

- 2019-09: $223.23 per share

- 2019-10: $211.62 per share

- 2019-11: $222.07 per share

- 2019-12: $233.65 per share

- 2020-01: $223.79 per share

- 2020-02: $194.89 per share

- 2020-03: $182.05 per share

- 2020-04: $187.00 per share

- 2020-05: $199.85 per share

- 2020-06: $180.40 per share

- 2020-07: $213.15 per share

- 2020-08: $216.26 per share

- 2020-09: $195.68 per share

- 2020-10: $222.82 per share

- 2020-11: $232.01 per share

- 2020-12: $247.42 per share

- 2021-01: $264.67 per share

- 2021-02: $273.88 per share

- 2021-03: $284.17 per share

- 2021-04: $299.87 per share

- 2021-05: $322.25 per share

- 2021-06: $345.61 per share

- 2021-07: $389.81 per share

- 2021-08: $414.02 per share

- 2021-09: $357.30 per share

- 2021-10: $367.55 per share

- 2021-11: $328.07 per share

- 2021-12: $372.60 per share

- 2022-01: $320.12 per share

- 2022-02: $316.73 per share

- 2022-03: $310.39 per share

- 2022-04: $303.02 per share

- 2022-05: $327.95 per share

- 2022-06: $330.98 per share

- 2022-07: $364.03 per share

- 2022-08: $298.60 per share

- 2022-09: $269.53 per share

- 2022-10: $299.17 per share

- 2022-11: $346.60 per share

- 2022-12: $342.58 per share

- 2023-01: $328.58 per share

- 2023-02: $310.89 per share

- 2023-03: $309.63 per share

- 2023-04: $300.36 per share

- 2023-05: $251.22 per share

- 2023-06: $266.54 per share

- 2023-07: $276.21 per share

- 2023-08: $280.80 per share

- 2023-09: $274.21 per share

- 2023-10: $238.53 per share

- 2023-11: $280.61 per share

- 2023-12: $329.23 per share

- 2024-01: $317.71 per share

- 2024-02: $337.42 per share

- 2024-03: $344.23 per share

- 2024-04: $309.04 per share

- 2024-05: $308.90 per share

- 2024-06: $290.12 per share

- 2024-07: $336.28 per share

- 2024-08: $346.35 per share

- 2024-09: $359.89 per share

- 2024-10: $323.11 per share

- 2024-11: $384.72 per share

- 2024-12: $370.98 per share

- 2025-01: $415.48 per share

- 2025-02: $377.34 per share

- 2025-03: $368.57 per share

- 2025-04: $347.73 per share

- 2025-05: $349.24 per share

- 2025-06: $349.04 per share

- 2025-07: $288.76 per share

- 2025-08: $301.80 per share

- 2025-09: $299.81 per share

- 2025-10: $349.60 per share

- 2025-11: $403.42 per share

- 2025-12: $379.83 per share

- 2026-01: $370.72 per share

- 2026-02: $319.38 per share

- 2026-03: $297.80 per share

- 2026-04: $309.23 per share

- 2026-05: $383.57 per share

- 2026-06: $375.04 per share

- 2026-07: $377.31 per share

- 2026-08: $414.63 per share

- 2026-09: $439.39 per share

- 2026-10: $429.17 per share

## Annual estimated value (USD per share)

- FY2016: low $120.77 per share, central $158.96 per share, high $180.81 per share

- FY2017: low $125.08 per share, central $152.47 per share, high $171.44 per share

- FY2018: low $120.10 per share, central $158.92 per share, high $182.70 per share

- FY2019: low $120.70 per share, central $174.04 per share, high $203.82 per share

- FY2020: low $114.29 per share, central $145.48 per share, high $169.09 per share

- FY2021: low $150.30 per share, central $211.75 per share, high $247.27 per share

- FY2022: low $170.21 per share, central $241.02 per share, high $281.89 per share

- FY2023: low $160.89 per share, central $224.49 per share, high $262.53 per share

- FY2024: low $166.69 per share, central $233.71 per share, high $273.59 per share

- FY2025: low $180.82 per share, central $250.23 per share, high $292.16 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1000697/000119312526062604/d778470d10k.htm); period 2025-12-31, filed 2026-02-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.