Waters Corp

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WAT : NYSE : Health Care
$149.40 | %
Today's Range: 149.15 - 150.20
Avg. Daily Volume: 456,300
07/22/16 - 4:01 PM ET

Financial Analysis


WATERS CORP's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. WATERS CORP is extremely liquid. Currently, the Quick Ratio is 5.62 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 12.85% 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.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)475.25460.4
EBITDA ($mil)146.79143.8
EBIT ($mil)123.36121.25
Net Income ($mil)94.0596.06


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)2505.172109.05
Total Assets ($mil)4368.43872.73
Total Debt ($mil)1718.81485.32
Equity ($mil)2101.691862.24


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin62.0563.26
EBITDA Margin30.8831.23
Operating Margin25.9626.34
Sales Turnover0.470.52
Return on Assets10.6911.81
Return on Equity22.2224.56
Debt Q1 FY16 Q1 FY15
Current Ratio6.325.34
Debt/Capital0.450.44
Interest Expense10.128.98
Interest Coverage12.1913.51


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)80.9282.7
Div / share0.00.0
EPS1.151.15
Book value / share25.9722.52
Institutional Own % n/a n/a
Avg Daily Volume472452.0570113.0

Valuation


BUY. WATERS CORP's P/E ratio indicates a discount compared to an average of 33.95 for the Life Sciences Tools & Services industry and a value on par with the S&P 500 average of 25.03. Conducting a second comparison, its price-to-book ratio of 5.75 indicates a significant premium versus the S&P 500 average of 2.80 and a premium versus the industry average of 5.49. 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
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WAT 26.42 Peers 33.95   WAT 21.37 Peers 22.39

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WAT is trading at a 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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WAT 21.57 Peers 25.04   WAT 2.13 Peers 1.48

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WAT is trading at a valuation on par with 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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WAT 5.75 Peers 5.49   WAT 4.24 Peers 34.26

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WAT is trading at a valuation on par with 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WAT 5.87 Peers 21.40   WAT 1.87 Peers 6.56

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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