Waters Corp

WAT · Technology (laboratory analytical instruments) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31

Waters Corp reported revenue of $3.2 billion in fiscal 2025, after growing 4.3% a year over the previous 9 years. Its operating margin narrowed from 28.8% in 2016 to 25.4%, and it earned 19.5% on its invested capital in the latest year. Of the $6.8 billion its operations generated over 10 years, 89.0% went to buybacks and 21.2% to acquisitions; the share count fell 26.7%. On the accounting screens, it passes 4 of 9 Piotroski tests, its Altman Z'' of 10.00 is in the safe zone and its Beneish M-score is below the -1.78 line; none of the six cross-checks between its statements fires.

Revenue, fiscal 2025 3.2B +4.3% a year over 9 years

Operating margin 25.4% gross margin 59.3%

Return on invested capital 19.5% 26.8% on average over 5 years

Free cash flow after stock pay 485.7M 15.3% of revenue

Net debt ÷ EBITDA 0.4× net debt 359.6M

Piotroski F-score 4/9 tests of improvement passed

Is it growing?

Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.

RevenueOperating income

Compound growth a year
	3 yrs	5 yrs	9 yrs
Revenue	+2.1%	+6.0%	+4.3%
Operating income	-2.8%	+4.5%	+2.8%
Net income	-3.2%	+4.3%	+2.3%
Earnings per share	-2.8%	+5.2%	+5.9%
Shares	-0.3%	-0.9%	-3.4%

Falling shares are buybacks: each remaining share owns more of the company.

Does it earn more than its capital costs?

Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.

    GrossOperatingNetFree cash flow
    
  

Return on invested capital

Return on invested capital Cost of capital today · 9.1%

Economic profit

(return on capital − cost of capital) × capital invested: the profit left after paying for the money used. Today's cost of capital is applied to every year, since a past one cannot be rebuilt honestly.

Return on equity: 25.1%
Return on assets: 12.7%
Asset turnover: 0.62×
Research & development: 6.2% of revenue
Overheads (SG&A): 26.2% of revenue

Is the profit cash, and where does the cash go?

Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.

Net incomeFree cash flowAfter stock-based pay

Where 10 years of operating cash went, 2016–2025

6.8B generated by the business. Each band is its share of that total.

Reinvested in the business 6% 415.9M
Acquisitions 21% 1.4B
Dividends 0% 0
Share buybacks 89% 6.0B
More than it generated: funded with cash or new debt -16% -1.1B

Over the same years it paid 401.6M in stock. The share count fell 26.7%. 5.6B of the buybacks went beyond offsetting that dilution.

Per share

    Earnings per shareFree cash flow per shareDividend per share
    
  

Shares outstanding

Diluted shares

How strong is the balance sheet?

Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.

Net debt

Net debt ÷ EBITDA: 0.4×
Interest coverage: 12× operating income ÷ interest
Current ratio: 1.73 current assets ÷ current liabilities
Cash conversion cycle: 228 days collects in 96d, stock 162d, pays in 29d

Three classic screens of the accounts

Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.

Piotroski F-score

Is the business improving? Nine yes-or-no tests, this year against last.

4of 9 tests passed

ProfitableReturn on assets above zero passed
Cash from operationsOperating cash flow above zero passed
Profitability improvedReturn on assets higher than a year before failed
Profit backed by cashOperating cash flow above net income (low accruals) passed
Less long-term debtLong-term debt as a share of assets fell passed
More liquidCurrent ratio higher than a year before failed
No new sharesShare count did not grow failed
Better gross marginGross margin higher than a year before failed
Sells more per assetAsset turnover higher than a year before failed

Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.

Altman Z''-score

Does the balance sheet look like those of companies that went bankrupt?

10.00safe zone

Working capital ÷ assets 0.18 × 6.56+1.17
Retained earnings ÷ assets 2.05 × 3.26+6.70
Operating income ÷ assets 0.16 × 6.72+1.06
Equity ÷ liabilities 1.02 × 1.05+1.07

Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.

Beneish M-score

Do the accounts resemble those of companies that manipulated their earnings?

-2.37below the -1.78 line

Receivables vs sales 1.06+0.97
Gross margin slipping 1.00+0.53
Soft assets 0.92+0.37
Sales growth 1.07+0.95
Slower depreciation 0.98+0.11
Overheads vs sales 1.12-0.19
Profit not in cash -0.00-0.01
Leverage rising 0.81-0.27

Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.

Where the statements disagree

Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.

None of the six cross-checks fires for the latest year: receivables and inventory move with revenue, profit turns into cash, investment keeps up with depreciation, the tax rate is ordinary and debt is moderate.

What is it worth, under which assumptions?

A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.

Revenue

Starting revenue

M $

revenue of fiscal 2025

Growth in year one

revenue grew +6.0% a year over the last 5 years; it fades to the terminal rate by the last year

Years until it settles

yrs

ten years for growth to fade to the terminal rate

Cash from each sale

Free cash flow margin today

free cash flow to the firm after stock-based pay ÷ revenue, last 3 fiscal years together

Margin in the last year

the margin in year ten; by default the business keeps today's

Count stock-based pay as a costIt is paid in shares instead of cash, and shareholders bear it through dilution. Most free cash flow figures leave it out.

The long run

Growth after that, forever

growth forever after year ten, below the risk-free rate: no company outgrows the economy forever

The discount rate

Risk-free rate

10-year US Treasury yield (FRED, DGS10), 2026-09-24

Beta

not measured on this public page, which uses only public filings: 1.0 assumes it moves like the market. Sign in to measure it from prices

Equity risk premium

the extra return demanded for holding shares; it cannot be measured, and 4–6% is the common range

Cost of debt, before tax

interest expense ÷ debt = 7.3%, kept between the risk-free rate and +8 points

Tax rate

effective rate in the last fiscal year, 14.9%, kept within 0–35%

The price

Share price

Type the price you see at your broker. It is used only for the reverse questions: what that price implies.

Back to the defaults

SEC from the filings Treasury the 10-year yield measured from prices assumption cannot be measured yours you changed it

Value per share, with these assumptions $160.25 discounted at 9.1% a year · 55% of it from after year 10

$119.2080% of 5,000 simulations$223.47

Cautious $97.97 2.0% growth · 14.9% margin · 10.1% discount · 2.0% forever

Your assumptions $160.25 6.0% growth · 17.5% margin · 9.1% discount · 2.5% forever

Generous $276.56 10.0% growth · 20.1% margin · 8.1% discount · 3.0% forever

Type a share price on the left to ask the reverse questions: what growth, what margin or what discount rate that price implies.

What the value implies, in the usual multiples

	At this model's value
Price ÷ earnings	14.9×
Enterprise value ÷ EBITDA	11.1×
Enterprise value ÷ revenue	3.1×
Free cash flow yield	5.1%

From cash flows to a value per share

10 years of cash flow, today4.5B

Everything after, today5.4B

The whole business9.9B

Minus net debt-359.6M

What belongs to shareholders9.6B

Divided among 59.7M shares: $160.25 each.

The projection next to its history

Reported free cash flow after stock pay, then the model's. A projection that looks nothing like the past needs a reason.

ReportedProjected

Year by year

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035
Revenue	3.4B	3.5B	3.7B	3.9B	4.1B	4.2B	4.4B	4.5B	4.7B	4.8B
Growth	6.0%	5.6%	5.2%	4.8%	4.4%	4.1%	3.7%	3.3%	2.9%	2.5%
Cash margin	17.5%	17.5%	17.5%	17.5%	17.5%	17.5%	17.5%	17.5%	17.5%	17.5%
Free cash flow	587.8M	620.8M	653.2M	684.8M	715.2M	744.3M	771.5M	796.8M	819.9M	840.3M
Worth today	538.7M	521.4M	502.8M	483.0M	462.3M	440.9M	418.9M	396.4M	373.8M	351.1M

If the least-known inputs move

Value per share as two inputs change at a time. Neighbouring cells that differ a lot are the conclusion: the value depends on numbers nobody knows to a point.

The discount rate and growth forever

discount ↓ · forever →	1.5%	2.0%	2.5%	3.0%	3.5%
8.1%	166	177	190	206	226
8.6%	153	163	174	187	203
9.1%	143	151	160	171	184
9.6%	133	140	148	158	168
10.1%	125	131	138	146	155

Year-one growth and the final margin

margin ↓ · growth →	2.0%	4.0%	6.0%	8.0%	10.0%
14.0%	113	123	134	146	159
15.8%	124	135	147	160	174
17.5%	135	147	160	174	190
19.3%	146	159	173	189	205
21.0%	156	171	186	203	221

All the inputs moving at once

5,000 valuations, each with growth, final margin, discount rate and growth forever drawn at random around the values on the left (spreads of 3.0%, 2.6%, 1.0% and 0.5%). Not a probability — the spreads are assumptions too — but an honest picture of how wide the answer is.

10th percentile$119.20

Median$160.53

90th percentile$223.47

Half of the simulations land between $136.45 and $189.70; one in ten below $119.20, one in ten above $223.47.

Does the long run make sense?

9.6×The terminal value prices the business in year 10 at 9.6 times that year's EBITDA.
13%To grow 2.5% forever while reinvesting 19% of its after-tax operating profit, the business must earn 13% on the new capital — it has earned 27% on average over the last five years.
55%of the value comes from after year 10. The more of it, the more the answer depends on the part nobody can see.

The discount rate, taken apart

What shareholders demand (CAPM): 5.18% risk-free + 1.00 beta × 5.0% premium = 10.18%.
What lenders charge, after the tax saving on interest: 7.34% × (1 − 14.9%) = 6.25%.
Weighted by how much of each the company uses (book value (no price given)): 9.12%, the rate every future cash flow is discounted at.

What it has filed lately

The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.

Event 2026-08-21

Changed a director or officer; published other information

Published the results of a shareholder vote

Signed a material agreement; took on a financial obligation; published other information

Event 2026-03-16

Published other information

Estimatein 44d

Results for the period ending 2026-10-03

Companies like this one

Same SEC industry (laboratory analytical instruments) first, then the rest of technology.

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Every figure, year by year

10 fiscal years · 30 measures

	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Size
Revenue	2.2B	2.3B	2.4B	2.4B	2.4B	2.8B	3.0B	3.0B	3.0B	3.2B
Revenue growth	—	+6.5%	+4.8%	-0.6%	-1.7%	+17.8%	+6.7%	-0.5%	+0.1%	+7.0%
Operating income	625.0M	662.2M	739.8M	708.5M	645.5M	821.7M	873.4M	817.7M	826.4M	802.6M
Net income	521.5M	20.3M	593.8M	592.2M	521.6M	692.8M	707.8M	642.2M	637.8M	642.6M
Margins
Gross margin	58.9%	59.0%	59.0%	58.0%	57.4%	58.5%	58.0%	59.6%	59.4%	59.3%
Operating margin	28.8%	28.7%	30.6%	29.4%	27.3%	29.5%	29.4%	27.7%	27.9%	25.4%
Net margin	24.1%	0.9%	24.5%	24.6%	22.1%	24.9%	23.8%	21.7%	21.6%	20.3%
Free cash flow margin	—	—	—	—	—	—	—	15.0%	20.9%	17.1%
R&D ÷ revenue	5.8%	5.7%	5.9%	5.9%	6.0%	6.0%	5.9%	5.9%	6.2%	6.2%
SG&A ÷ revenue	23.6%	23.6%	22.2%	22.2%	23.4%	22.5%	22.1%	24.9%	23.3%	26.2%
Cash
Free cash flow	—	—	—	—	—	—	—	442.2M	619.6M	539.8M
Stock-based pay	41.0M	39.4M	37.5M	38.6M	36.9M	29.9M	42.6M	36.9M	44.7M	54.1M
Free cash flow after stock pay	—	—	—	—	—	—	—	405.3M	574.9M	485.7M
Free cash flow to the firm	—	—	—	—	—	—	—	588.9M	665.8M	471.9M
Free cash flow ÷ net income	—	—	—	—	—	—	—	0.7×	1.0×	0.8×
Capex ÷ revenue	—	—	—	—	—	—	—	5.4%	4.8%	3.6%
Returns
Return on invested capital	13.2%	0.5%	23.7%	42.2%	34.7%	37.5%	36.4%	20.6%	20.2%	19.5%
Return on equity	22.7%	0.9%	37.9%	—	224.7%	188.5%	140.3%	55.8%	34.9%	25.1%
Return on assets	11.2%	0.4%	15.9%	23.2%	18.4%	22.4%	21.6%	13.9%	14.0%	12.7%
Asset turnover	0.5×	0.4×	0.6×	0.9×	0.8×	0.9×	0.9×	0.6×	0.6×	0.6×
Economic profit	166.6M	-364.9M	396.3M	485.0M	406.2M	534.6M	552.7M	398.1M	383.2M	363.3M
Per share
Earnings per share	$6.41	$0.25	$7.65	$8.69	$8.36	$11.17	$11.73	$10.84	$10.71	$10.76
Free cash flow per share	—	—	—	—	—	—	—	$7.46	$10.41	$9.04
Dividend per share	—	—	—	—	—	—	—	—	—	—
Payout ratio	—	—	—	—	—	—	—	—	—	—
Book value per share	$28.77	$28.16	$21.44	$-3.46	$3.73	$6.05	$8.54	$19,439.32	$30.79	$43.01
Diluted shares	81.4M	80.6M	77.6M	68.2M	62.4M	62.0M	60.3M	59.3M	59.6M	59.7M
Balance sheet
Net debt	1.3B	1.4B	352.1M	1.3B	919.8M	1.0B	1.0B	1.9B	1.3B	359.6M
Net debt ÷ EBITDA	2.0×	1.9×	0.4×	1.8×	1.3×	1.1×	1.1×	2.1×	1.4×	0.4×
Interest coverage	13.9×	11.7×	15.2×	14.6×	13.2×	18.3×	17.9×	8.3×	9.2×	11.5×
Current ratio	7.0×	7.0×	5.9×	2.2×	1.7×	2.4×	2.2×	2.2×	2.1×	1.7×
Cash conversion cycle (days)	162	164	168	187	173	162	195	218	205	228
Scores
Piotroski F-score	—	7	7	6	5	8	5	4	6	4
Altman Z''	10.07	9.42	11.24	12.03	11.16	12.15	12.39	9.35	10.20	10.00
Beneish M	—	-3.05	-2.21	-2.55	-2.89	-2.53	-2.19	-2.21	-2.48	-2.37

Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.