## Waters (WAT) Earnings Preview: What to Expect on November 1st
Investors are gearing up for Waters Corporation’s (WAT) quarterly earnings release on Friday, November 1st, 2024. While analysts are predicting an earnings per share (EPS) of $2.68, the real focus will be on the company’s guidance for the upcoming quarter. This is a crucial factor that often drives market reactions, even more so than the current earnings report itself.
Historical Earnings Performance: A Look Back
Waters has a track record of exceeding expectations. In the last quarter, the company beat EPS estimates by $0.07, leading to a 4.83% increase in share price the following day. Here’s a breakdown of Waters’ past performance and the resulting price changes:
| Quarter | EPS Estimate | EPS Actual | Price Change % |
|—|—|—|—|
| Q2 2024 | 2.56 | 2.63 | 5.0% |
| Q1 2024 | 2.10 | 2.21 | -1.0% |
| Q4 2023 | 3.55 | 3.62 | -2.0% |
| Q3 2023 | 2.55 | 2.84 | -2.0% |
Share Price Outlook: A Bullish Trend
As of October 30th, Waters shares were trading at $326.59. Over the past 52 weeks, shares have climbed 24.59%, indicating a positive long-term trend. This bullish sentiment among long-term shareholders is likely to fuel expectations for a strong earnings report.
Analyst Perspectives: A Mixed Bag
For investors, understanding the overall market sentiment and expectations is vital. Here’s a look at the latest insights on Waters from analysts:
*
Waters has received a total of 4 ratings from analysts, with the consensus rating as Buy.
This suggests a positive outlook on the company’s future performance.*
The average one-year price target is $365.0, indicating a potential 11.76% upside.
This suggests that analysts believe Waters has the potential for continued growth.Peer Comparisons: Assessing Waters’ Competitive Landscape
To gain further insights into Waters’ performance and market position, we’ll compare it to three prominent industry players: Avantor, Illumina, and Revvity.
| Company | Consensus Rating | Average 1-Year Price Target | Potential Upside/Downside |
|—|—|—|—|
| Avantor | Outperform | $28.67 | -91.22% |
| Illumina | Neutral | $167.41 | -48.74% |
| Revvity | Outperform | $135.0 | -58.66% |
Key Takeaways from Peer Comparisons
* Waters’ consensus rating of Buy outperforms Avantor, Illumina, and Revvity. This suggests a stronger overall outlook for Waters.
* While the average price target for Waters is lower than its peers, it is still positive, indicating potential for upside.
A Deeper Dive into Waters’ Financials
Waters’ financial performance provides a crucial insight into its current position and future potential:
*
Market Capitalization:
Waters’ market capitalization is relatively small compared to industry averages, potentially posing challenges for growth.*
Revenue Growth:
Waters has faced challenges in revenue growth over the past three months, experiencing a decline of approximately -4.33%. This lags behind its peers in the healthcare sector.*
Net Margin:
Waters’ net margin is impressive, exceeding industry standards. This highlights the company’s efficient cost management and strong profitability.*
Return on Equity (ROE):
Waters’ ROE also surpasses industry standards, showcasing the effectiveness of capital utilization.*
Return on Assets (ROA):
Waters’ ROA is impressive, demonstrating effective asset utilization and strong financial performance.*
Debt Management:
Waters’ debt-to-equity ratio is notably higher than the industry average. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.Waters’ Core Business: Delivering Value Through Innovation
Waters specializes in liquid chromatography, mass spectrometry, and thermal analysis tools. These instruments are essential for providing critical information on various products, such as their molecular structures and physical properties. This helps clients across various industries to enhance the health and well-being of end users.
In 2023, Waters’ revenue came from three primary sources:
*
Biopharmaceutical Customers:
57% of revenue*
Industrial Clients:
31% of revenue*
Academic/Government Institutions:
12% of revenueConclusion: A Company with a Strong Foundation
Waters has established itself as a leader in analytical instrumentation, serving a diverse range of clients. While the company faces challenges in revenue growth, its strong financial performance and innovative products position it for potential success. As investors prepare for the upcoming earnings release, they should pay close attention to the company’s guidance and its plans for future growth. The information presented in this article is intended for informational purposes only and should not be considered investment advice.
