* Note: Prices are in Million (M) USD.
Description:
Waters Corporation is a publicly traded Analytical Laboratory instrument and software company headquartered in Milford, Massachusetts.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $367 M
Debt : $1,538 M
EBITDA : $1,002 M
Net Debt (Debt - Cash): $1,171 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Healthcare
Industry: Diagnostics & research
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 22.15
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $430 M
Average Revenue: $2,080 M
Revenue Converted To Free Cash Flow (%): 20.7%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $2,958 M
Revenue 4 Years Ago (2020-12-31): $2,365 M
Last 5 Years Average Revenue Growth: 5%
Since Revenue Growth is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $60 M
Share Count 5 Years Ago (2020-12-31): $62 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $14.25
Trailing 12-Month Earnings Per Share (EPS): $13.00
Average Earnings Per Share (EPS): $13.63
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 19 valid ROE years (max 20).Average ROE: 60.2%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $302
52-Week Low: $275
Threshold Price (15% Above 52-Week Low): $316
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $17,354 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 27 points to above Waters Corporation (WAT) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (22.83)
× EPS ($13.63) = $311.06.
Last 20 Years Avg PE 22.83, Fair Value PE 15, Industry Based PE 18, Growth Based PE 5, RCFC Based PE 26.55, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 22.07. Value-Trades has assined P/E value 22.07. Since an average (Current Year EPS + Next Year EPS) earning per share is $13.625.
The fair value of Waters Corporation (WAT) stock should be (22.07 x $13.625) = $300.65.
