-0.47 | -0.48%
WATERS CORP's gross profit margin for the first quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. WATERS CORP is extremely liquid. Currently, the Quick Ratio is 4.13 which clearly shows the ability to cover any short-term cash needs. WAT managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.
During the same period, stockholders' equity ("net worth") has increased by 14.67% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
| Income Statement | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Net Sales ($mil) | 430.34 | 420.46 |
| EBITDA ($mil) | 128.69 | 125.17 |
| EBIT ($mil) | 110.43 | 110.6 |
| Net Income ($mil) | 121.06 | 88.67 |
| Balance Sheet | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 1589.86 | 1353.55 |
| Total Assets ($mil) | 3207.32 | 2839.42 |
| Total Debt ($mil) | 1233.23 | 1023.62 |
| Equity ($mil) | 1476.5 | 1287.53 |
| Profitability | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Gross Profit Margin | 63.12 | 63.09 |
| EBITDA Margin | 29.9 | 29.76 |
| Operating Margin | 25.66 | 26.3 |
| Sales Turnover | 0.58 | 0.65 |
| Return on Assets | 15.39 | 15.04 |
| Return on Equity | 33.44 | 33.17 |
| Debt | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Current Ratio | 4.8 | 3.12 |
| Debt/Capital | 0.46 | 0.44 |
| Interest Expense | 7.19 | 6.49 |
| Interest Coverage | 15.37 | 17.04 |
| Share Data | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Shares outstanding (mil) | 85.66 | 88.84 |
| Div / share | 0.0 | 0.0 |
| EPS | 1.39 | 0.98 |
| Book value / share | 17.24 | 14.49 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 458195.0 | 474716.0 |
BUY. The current P/E ratio indicates a significant discount compared to an average of 31.37 for the Life Sciences Tools & Services industry and a value on par with the S&P 500 average of 19.08. For additional comparison, its price-to-book ratio of 5.63 indicates a significant premium versus the S&P 500 average of 2.44 and a significant premium versus the industry average of 3.47. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, WATERS CORP seems to be trading at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| WAT 17.33 | Peers 31.37 | WAT 17.84 | Peers 17.21 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. WAT is trading at a significant discount to its peers. |
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. WAT is trading at a valuation on par to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| WAT 16.44 | Peers 21.26 | WAT 45.61 | Peers 4.87 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. WAT is trading at a discount to its peers. |
Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. WAT trades at a significant premium to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| WAT 5.63 | Peers 3.47 | WAT 20.17 | Peers 56.73 | |||||||||||||||||||||
|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. WAT is trading at a significant premium to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, WAT is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| WAT 4.49 | Peers 15.85 | WAT 0.51 | Peers 8.05 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. WAT is trading at a significant discount to its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. WAT significantly trails its peers on the basis of sales growth |
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