DCF Studio

    WAT · NYQ · Healthcare

    Waters Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 333.08

    Market price

    USD 449.53

    Implied upside

    -25.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 44.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 333.08-25.9%
    Exit multiple
    USD 529.29+17.7%
    Market price
    USD 449.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 4.7bnUSD 5.2bnUSD 5.7bnUSD 6.2bnUSD 6.7bnUSD 7.1bnUSD 7.5bnUSD 7.8bnUSD 8.1bnUSD 8.3bn+6.4%
    EBITUSD 1.3bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.3bn+6.4%
    NOPATUSD 1.1bnUSD 1.2bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 2.0bn+6.4%
    Add depreciation & amortisationUSD 273.0mUSD 301.5mUSD 330.0mUSD 357.9mUSD 384.7mUSD 409.5mUSD 432.0mUSD 451.4mUSD 467.1mUSD 478.8m+6.4%
    Less capital expenditureUSD -237.2mUSD -267.8mUSD -299.4mUSD -331.5mUSD -363.6mUSD -395.0mUSD -424.9mUSD -452.6mUSD -477.3mUSD -498.4m+8.6%
    Capex, % of revenue5.0%5.1%5.2%5.3%5.4%5.5%5.7%5.8%5.9%6.0%-
    Less increase in working capitalUSD -600.5mUSD -188.2mUSD -188.1mUSD -184.2mUSD -176.3mUSD -164.3mUSD -148.1mUSD -127.9mUSD -104.0mUSD -77.1m-20.4%
    Free cashflow to firmUSD 553.3mUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bn+14.5%
    Discount factor0.95620.87420.79920.73070.66810.61080.55840.51050.46680.4267-
    Present valueUSD 529.0mUSD 944.4mUSD 954.3mUSD 955.7mUSD 948.6mUSD 932.9mUSD 909.1mUSD 877.7mUSD 839.6mUSD 795.5m-
    Present Value Of The ForecastUSD 8.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.099Reported 1.148, pulled toward 1.0 (Blume)
    Cost of equity9.54%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 11.5x interest cover. Book interest / average debt was lower, at 4.4%.
    Market capitalisationUSD 44.1bn96.7% of capital
    Total debtUSD 1.5bn3.3% of capital, book value as a proxy
    Tax rate15.2%Effective, capped at statutory
    WACC9.38%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 333.08

    58% of EV

    Forecast FCFF, final year
    USD 1.9bn
    Capex at depreciation, working capital in reinvestment
    USD 2.2bn
    Less reinvestment at g/ROIC (12.4% of NOPAT)
    USD -269.2m
    Capitalised
    USD 1.9bn
    ROIC (reported)
    20.2%
    Terminal value, undiscounted
    USD 28.4bn
    Terminal value, discounted
    USD 12.1bn
    Enterprise value
    USD 20.8bn
    Less net debt
    USD 903.3m
    Equity value
    USD 19.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 529.29

    73% of EV

    Terminal value, undiscounted
    USD 55.8bn
    Terminal value, discounted
    USD 23.8bn
    Enterprise value
    USD 32.5bn
    Less net debt
    USD 903.3m
    Equity value
    USD 31.6bn

    Spread between methods: 46%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.38%445.53463.43485.42512.89547.97
    8.38%373.45383.77396.17411.24429.78
    9.38%319.93325.94333.08341.63351.94
    10.38%278.70282.11286.18291.03296.84
    11.38%246.00247.80249.99252.63255.81

    Outlined: this model. Green text: above today's price of 449.53. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.1%10.2%14.1%
    EBIT margin29.7%27.8%37.2%
    Discount rate-9.4%7.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.