Value
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 3.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.9 |
| PEG | 4.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 21.7x
- ▸PEG: 1.59
WAT · Why this verdict
Why Waters (WAT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Waters Corporation has beaten earnings estimates in all 4 of the last 4 quarters and posted exceptional revenue growth of 91% year-over-year, but negative price momentum with a falling on-balance-volume and a cash flow red flag — free cash flow was -112% of net income — create meaningful fundamental concerns.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Waters has beaten EPS consensus in all 4 of the last 4 quarters with an average positive surprise of 5.8%, while reporting 91% year-over-year revenue growth that makes it the top growth performer in its industry peer group. Earnings | Earnings beat streak extends to 6 consecutive quarters and revenue growth remains above 20% year-over-year for at least 2 more quarters. | →Stable |
| CounterRevenue growth of 91% likely reflects an acquisition or a post-disruption recovery base effect rather than organic expansion; the underlying growth rate may be far lower and may normalize sharply. | ||
Free cash flow was -112% of net income, meaning Waters is reporting positive net income but consuming more cash than it earns, which is a significant quality concern flagged as an earnings quality red flag in the data. Quality breakdown | Free cash flow improves to at least 50% of net income on a trailing 12-month basis within the next 2 annual reporting cycles. | →Stable |
| CounterNegative FCF relative to net income can reflect heavy capital investment in growth capacity that will generate returns over time; the strong Piotroski F-Score of 8 out of 9 suggests the balance sheet remains solid. | ||
On-balance-volume is declining and the MACD has turned bearish, indicating selling pressure from institutional holders even as price holds above the 200-day moving average, which is a classic divergence that often precedes a price correction. Momentum breakdown | On-balance-volume trend reverses to rising within 6 months and MACD returns to positive territory. | →Stable |
| CounterPrice is above the 200-day moving average and RSI at 59 is not in oversold territory, suggesting the selling pressure is modest and may represent normal profit-taking after a strong run. | ||
A put/call ratio of 1.33 indicates that options market participants are positioned defensively, buying more protection against downside than upside exposure, which is unusual for a stock with a strong earnings beat streak. Options | Put/call ratio falls below 0.8 within 12 months, reflecting improved options market sentiment as fundamental concerns are resolved. | →Stable |
| CounterElevated put/call ratios can reflect hedging by long holders rather than directional bearish bets; many institutional positions are routinely hedged regardless of conviction level. | ||
Waters has beaten EPS consensus in all 4 of the last 4 quarters with an average positive surprise of 5.8%, while reporting 91% year-over-year revenue growth that makes it the top growth performer in its industry peer group.
→StableEarnings
- Expectation
- Earnings beat streak extends to 6 consecutive quarters and revenue growth remains above 20% year-over-year for at least 2 more quarters.
CounterRevenue growth of 91% likely reflects an acquisition or a post-disruption recovery base effect rather than organic expansion; the underlying growth rate may be far lower and may normalize sharply.
Free cash flow was -112% of net income, meaning Waters is reporting positive net income but consuming more cash than it earns, which is a significant quality concern flagged as an earnings quality red flag in the data.
→StableQuality breakdown
- Expectation
- Free cash flow improves to at least 50% of net income on a trailing 12-month basis within the next 2 annual reporting cycles.
CounterNegative FCF relative to net income can reflect heavy capital investment in growth capacity that will generate returns over time; the strong Piotroski F-Score of 8 out of 9 suggests the balance sheet remains solid.
On-balance-volume is declining and the MACD has turned bearish, indicating selling pressure from institutional holders even as price holds above the 200-day moving average, which is a classic divergence that often precedes a price correction.
→StableMomentum breakdown
- Expectation
- On-balance-volume trend reverses to rising within 6 months and MACD returns to positive territory.
CounterPrice is above the 200-day moving average and RSI at 59 is not in oversold territory, suggesting the selling pressure is modest and may represent normal profit-taking after a strong run.
A put/call ratio of 1.33 indicates that options market participants are positioned defensively, buying more protection against downside than upside exposure, which is unusual for a stock with a strong earnings beat streak.
→StableOptions
- Expectation
- Put/call ratio falls below 0.8 within 12 months, reflecting improved options market sentiment as fundamental concerns are resolved.
CounterElevated put/call ratios can reflect hedging by long holders rather than directional bearish bets; many institutional positions are routinely hedged regardless of conviction level.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 2.2 |
| Gross margin | 7.0 |
| Op margin | 1.1 |
| Net margin | 6.0 |
| Current ratio | 6.4 |
| FCF quality | 0.0 |
| Moat | 7.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -112% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 91% YoY
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 6.2 |
| erm sentiment | 4.9 |
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.9 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 5.1 |
| growth rank | 9.6 |
- ▸Industry growth leader
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.9 |
| support resistance | 3.5 |
| 52w position | 7.8 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 7.0 |
| volatility | 4.5 |
| put call | 0.0 |
| implied vol | 6.4 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 8.5 |
- ▸Elevated put/call: 3.33
- ▸Above max pain $250
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.30
Upside
-2.4%
Downside
8.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 42 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: INSIDER:OK. Top dim: Growth at 10.0; weakest: Momentum at 3.6. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 10.0, Sentiment at 6.4, and Insider at 6.3; the weakest are Momentum at 3.6, Value at 3.8, and Peer rank at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.30 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Waters has beaten EPS consensus in all 4 of the last 4 quarters with an average positive surprise of 5.8%, while reporting 91% year-over-year revenue growth that makes it the top growth performer in its industry peer group.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the perfect beat streak.
- P2Free cash flow was -112% of net income, meaning Waters is reporting positive net income but consuming more cash than it earns, which is a significant quality concern flagged as an earnings quality red flag in the data.
Trip ifFree cash flow remains negative relative to net income for more than 2 consecutive annual periods.
- P3On-balance-volume is declining and the MACD has turned bearish, indicating selling pressure from institutional holders even as price holds above the 200-day moving average, which is a classic divergence that often precedes a price correction.
Trip ifPrice drops below the 200-day moving average and falls more than 10% below the current $357.76.
- P4A put/call ratio of 1.33 indicates that options market participants are positioned defensively, buying more protection against downside than upside exposure, which is unusual for a stock with a strong earnings beat streak.
Trip ifPut/call ratio rises above 2.0, more than 50% above the current 1.33, indicating increasing protective positioning.