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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Waters Corporation (XNYS:WAT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WAT
Name:
WATERS CORPORATION (XNYS:WAT)
Sector:
165.31M
Industry:
Diagnostics & Research
CEO:
Mr. Christopher O'Connell
Total Employees:
7,800
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -97.26% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WATERS CORPORATION(WAT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DIAGNOSTICS & RESEARCH INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
298.32
One Month Price Target:
$299.78
Six Month Price Target :
$307.07
Likely Price in One Year's Time:
Ticker:
$315.83
Likely Trading Range Today Under (Normal Volatility)
$297.45
Price Upper limit ($) :
$299.55
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$285.78
This week:
$270.28
This month :
$242.25
Other Primary facts
Market Cap:
17.84B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
59.88M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.48%
-9.26%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$356.48
$329.64
$240.16
$267.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$320.90
Buy Put:
Sell Put:
$315.17
$275.67
$281.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WAT
Sharpe Ratio:
2.46%
Comparison:
WAT, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -2.33% lower than the industry
& ratio is 7.90% higher than the market/S&P 500 average
Average Returns/Yield of
WAT
Daily returns:
0.06%
Weekly returns:
0.30%
Monthly returns:
1.20%
Yearly returns:
27.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is -48.51% below industry average
Classification:
WAT, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.76
Statistical test of Returns:
WAT has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.08%
Weekly Volatility:
4.64%
Monthly Volatility:
9.28%
Yearly Volatility:
32.15%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.66%
Volatility in last five trading days has been -68.06% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.20%
Weekly VaR:
-9.40%
Monthly VaR:
-18.80%
How Much Can the price of
WAT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-65.11%
This translates to price declining to:
$250.79
This translates to price declining to:
$104.09
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WAT is a 32.66% riskier investment compared to the market/S&P 500 & is 13.65% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -46.24% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WAT
Beta in relation to market/S&P 500--0.87
Expected beta in 1 year's time:
0.641
Expected beta in 3 year's time:
0.907
Unlevered (debt free) Beta:
0.196
Beta in relation to Nasdaq (XNAS):
0.691
Beta in relation to all global stocks::
0.669
Beta Comparison & Analysis
Beta of competitors/peers::
1.003
Beta is -12.93% lower than peers
Average Industry Beta:
1.181
Beta is -26.07% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
238.50%
Sustainable growth rate is 351.52% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.052
Alpha is -68.56% below industry average alpha yield
Alpha is 334% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WAT
Equity cost of capital:
0.091
Equity cost of capital is -18.77% below industry mean WACC
Unlevered (without debt) cost of capital:
2.05%
Before-tax cost of debt:
2.82%
After-tax cost of debt:
2.23%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.23%
WACC is -34.73% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$47.90
Revenue growth rate per share of (3Y):
47.64
Annual revenue growth rate is -64.00% below industry average
EPS:
$11.44
Expected Annual growth rate of EPS (3Y):
8.44%
Expected future EPS growth rate is -68.56% lower than the Diagnostics & Research industry
Free cash flow (FCF) per share:
$9.17
-
-
Debt per share
$25.14
EBITDA per share
$16.62
Valuation Analysis Today of
WAT
P/E Ratio:
26
P/E Ratio of Competitors/Peers:
23.28
P/E ratio is 11.67% higher than main peers & is -30.07% lower than the industry
Stock price/value with industry average P/E ratio: $425.30
WAT is -29.86% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
6.23
Price to sales ratio is -34.46% below the industry mean
P/B (Price to book value ratio):
47.64
Price to free cash flow: 32.53
-
Net income growth rate (3Y):
44.68%
Net income growth rate is -119.55% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
401.47%
Net debt to equity ratio:
280.39%
Debt to assets ratio:
49.49%
Net debt to assets ratio:
34.57%
Debt-to-asset ratio is 1.85% above industry average
Ability to repay debt:
Interest coverage ratio:
23.05
Interest coverage ratio is -182.18% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 4.44%
Analysis of Key Statistics
Correlation of price movement with the market:
0.671
Statistical significance of correlation:
WAT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.488
Stock price is 37.62% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.488
Correlation of price movement with Nasdaq (^IXIC):
0.017
Covariance of price movement with the market:
0.021
Kurtosis
4.957
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.519
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
WAT
Gross Profit Margin Ratio:
234%
Operating Profit Margin Ratio:
29.50%
Operating profit margin is -126.22% lower than the industry
Net Profit Margin Ratio:
234%
Effective Tax Rate:
13.99%
Effective tax rate is -27.12% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
187.91%
Return on equity (ROE) is 794.43% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
23.17%
Return on assets (ROA) is -108.59% lower than the industry
Financial Leverage:
2.0x
Current Ratio:
2.3
Current ratio is -53.63% below industry average
Cash Conversion Cycle (days):
77.4
Cash conversion cycle is 55.97% above industry average
-
Stock based compensation to net income ratio:
1.55%
In-depth Efficiency Analysis
Revenue generated per employee:
367.7K
Each employee generates -1% less revenue than industry average revenue per employee
EBITDA generated per employee:
127.6K
Each employee generates 325% more EBITDA than industry average revenue per employee
Profit generated per employee:
90.3K
Each employee generates 465% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
21.2K
Each employee generates -1074% less free cash flow than industry average revenue per employee
Assets/Capital per employee
186.7K
Each employee generates -1074% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 19.59%
Growth rate in R&D investment/expenditure is -1188.19% lower than the industry
Competitors/Peer firms of
WAT
THE COOPER COMPANIES, INC. (XNYS:COO)
BIO-B
BIO-RAD LABORATORIES, INC. (XNYS:BIO)
PERKINELMER, INC. (XNYS:PKI)
QUEST DIAGNOSTICS INCORPORATED (XNYS:DGX)
Fresenius Medical Care AG & Co KGaA (XNYS:FMS)
STERIS PUBLIC LIMITED COMPANY (XNYS:STE)
MOLINA HEALTHCARE, INC. (XNYS:MOH)
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (XNYS:CRL)
Current Analyst Ratings
Strong buy�21%
Buy�0%
Hold�38%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
2.87B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.19B
1.68B
170.74M
-
641.25M
-
6.98M
818.96M
8.36M
43.18M
132.99M
995.27M
845.91M
704.55M
819.10M
114.56M
704.55M
Statement of Cash Flow
Date:
Period:
32.66M
Differed Income Tax :
4.18M
Stock Based Compensation :
10.93M
Change in Working Capital :
- 19024.00K
Accounts Receivables:
- 907.00K
Other Working Capital:
91.51M
Other Non-Cash Items:
9.38M
Net Cash Provided by Operating Activities:
197.96M
Investments in PP&E:
- 27751.00K
Net Acquisitions:
-
Purchases of Investments:
- 9219.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/2/22
2022
Q1
480.07M
23.03M
503.10M
607.26M
381.90M
92.92M
1.59B
634.14M
435.81M
236.41M
-
-
149.74M
1.46B
-
3.04B
93.24M
26.09M
82.63M
315.09M
253.42M
687.83M
1.51B
473.25M
1.98B
-
2.67B
1.62M
7.96B
- 117725.0K
- 7469624.00K
April 2, 2022 at 6:00:00 AM
2.01B
374.94M
3.04B
-
1.53B
1.1B
60.86M
- 4897.00K
18.99M
- 70000.00K
-
- 170136.00K
-
12.73M
- 227411.00K
- 10705.00K
- 21164.00K
480.07M
501.23M
197.96M
- 32648.00K
165.31M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WAT
2023
2024
2025
2026
2027
$350.23
$370.79
$392.55
$415.58
$439.97