Unveiling the Investment Potential of Waters Corp (WAT): A Comprehensive Analysis of Financial ...
Waters Corp (NYSE:WAT) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $274.79, Waters Corp has witnessed a daily loss of 0.37%, marked against a three-month change of 2.09%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Waters Corp is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Waters Corp's GF Score components are as follows:
Financial strength rank: 5/10
Profitability rank: 10/10
Growth rank: 10/10
GF Value rank: 9/10
Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and a slightly lower financial strength rank, GuruFocus assigned Waters Corp the GF Score of 96 out of 100, which signals the highest outperformance potential.
Understanding Waters Corp Business
Waters Corp, with a market cap of $16.24 billion, is a leading provider of liquid chromatography, mass spectrometry, and thermal analysis tools. These analytical instruments provide essential information on various products, such as their molecular structures and physical properties, to help clients enhance the health and well-being of end users. As a percentage of sales in 2022, Waters generated 59% from pharmaceutical customers, 31% from industrial clients, and 10% from academic/government institutions. The company's operating margin stands at 28.48%, indicating a strong profitability potential.
Profitability Rank Breakdown
The Profitability Rank shows Waters Corp's impressive standing among its peers in generating profit. Waters Corp's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Waters Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 11.7%, which outperforms better than 53.66% of 205 companies in the Medical Diagnostics & Research industry. Moreover, Waters Corp has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 11.4, and the rate over the past five years is 11.5. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Waters Corp's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in making informed investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
