Should You Investigate Waters Corporation (NYSE:WAT) At US$331?
Waters Corporation (NYSE:WAT) led the NYSE gainers with a relatively large price hike in the past couple of weeks. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Waters’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Waters
What Is Waters Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.03% above our intrinsic value, which means if you buy Waters today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $321.51, there’s only an insignificant downside when the price falls to its real value. Furthermore, Waters’s low beta implies that the stock is less volatile than the wider market.
What does the future of Waters look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 21% over the next couple of years, the future seems bright for Waters. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? WAT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on WAT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Waters, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Waters you should be aware of.
If you are no longer interested in Waters, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
