Waters Corp (WAT, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance. With a current share price of $343.41 and a daily gain of 2.08%, coupled with a three-month change of 6.41%, Waters Corp stands out in the market. A detailed analysis, supported by the GF Score, indicates that Waters Corp is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These aspects are weighted differently and have been backtested from 2006 to 2021, showing a strong correlation with long-term stock performance. High GF Scores are typically associated with higher future returns. For Waters Corp, the GF Score is an impressive 97 out of 100, indicating a high potential for outperformance.
Understanding Waters Corp's Business
Waters Corp, with a market cap of $20.37 billion and annual sales of $2.91 billion, specializes in the production of liquid chromatography, mass spectrometry, and thermal analysis instruments. These tools are crucial for analyzing molecular structures and physical properties, aiding clients across biopharmaceuticals, industrial sectors, and academic institutions. In 2023, Waters Corp's sales distribution included 57% from biopharmaceutical customers, 31% from industrial clients, and 12% from academic and government institutions.
Financial Strength Breakdown
Waters Corp's financial robustness is reflected in its Financial Strength Rank of 6/10. The company boasts an Interest Coverage ratio of 7.45, significantly above the benchmark of 5 preferred by Benjamin Graham. Additionally, its Altman Z-Score of 5.31 indicates low risk of financial distress, and a Debt-to-Revenue ratio of 0.71 showcases prudent debt management.
Profitability and Growth Metrics
Waters Corp's Profitability Rank is outstanding at 10/10. The company's Gross Margin has consistently improved over the past five years, reaching 59.57% in 2023. This trend highlights Waters Corp's increasing efficiency in converting revenue into profit. Furthermore, the company's Growth Rank also stands at 10/10, with a notable 3-Year Revenue Growth Rate of 9.6%, outperforming 59.41% of its industry peers.
Conclusion: A Strong Candidate for Market Outperformance
Considering Waters Corp's robust financial strength, exceptional profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with high GF Scores using the GF Score Screen available to GuruFocus Premium members.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
