Is Waters Corporation (WAT) overvalued?
On Equity Rank's model estimate, WAT trades 184% above its fair value. Waters Corporation (WAT) last closed at $457.60; the multi-method model fair value is $161.00.
| Price | Model fair value | Price vs model |
|---|---|---|
| $457.60 | $161.00 | 184% above |
What the answer rests on
- 1 of 5 valuation methods put WAT's value above its price and 4 put it below, so the methods mostly agree.
- To justify today's price, WAT's free cash flow would need to grow about 27.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 8.0% a year.
- WAT trades at 195.7 times its last year's earnings, against a median of 37.5 for 26 profitable Life Sciences Tools companies.
- Over the past year the price sat below the model fair value on 49% of trading days. The gap ranged from 7% below to 189% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind WAT's fair value · What prices assume · Other companies