| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 219.70 | -41 |
| Intrinsic value (DCF) | 165.51 | -55 |
| Graham-Dodd Method | 47.80 | -87 |
| Graham Formula | 66.60 | -82 |
Waters Corporation (LSE: 0LTI.L) is a global leader in analytical workflow solutions, specializing in high-performance liquid chromatography (HPLC), ultra-performance liquid chromatography (UPLC), and mass spectrometry (MS) technologies. Headquartered in Milford, Massachusetts, the company serves a diverse clientele, including pharmaceutical, life sciences, industrial, and environmental sectors. Waters operates through two key segments: Waters, focusing on chromatography and MS instruments, and TA, which provides thermal analysis, rheometry, and calorimetry solutions. With a strong emphasis on R&D and quality assurance, Waters' products are critical in drug discovery, clinical testing, protein analysis, and environmental safety. Founded in 1958, the company has established itself as a trusted partner for laboratories worldwide, offering cutting-edge instruments, consumables, and software. Waters' commitment to innovation and customer support positions it as a key player in the $50B+ analytical instruments market, driving advancements in healthcare and industrial applications.
Waters Corporation presents a compelling investment case due to its leadership in high-margin analytical instruments and recurring revenue from consumables and services. The company's strong market position in chromatography and mass spectrometry, combined with its exposure to growing pharmaceutical and life sciences R&D spending, provides stability. However, risks include reliance on capital expenditure cycles in its end markets, competitive pressures from larger players like Thermo Fisher and Agilent, and a debt load of $1.7B against $324M in cash. With a market cap of $20.4B, a beta of 1.14 indicating moderate volatility, and no dividend, Waters may appeal to growth-oriented investors. The lack of dividends could be a drawback for income-focused portfolios, but its strong operating cash flow ($762M) supports further innovation and market expansion.
Waters Corporation holds a strong niche position in high-performance liquid chromatography (HPLC) and mass spectrometry, competing primarily with larger, diversified players like Thermo Fisher Scientific and Agilent Technologies. Its competitive advantage lies in its specialized focus, high-quality instrumentation, and deep customer relationships in pharmaceuticals and academia. Unlike broader competitors, Waters excels in ultra-performance liquid chromatography (UPLC), a faster and more efficient technology that has become an industry standard. However, its smaller scale compared to giants like Thermo Fisher limits its ability to bundle products and offer enterprise-wide lab solutions. The TA segment competes with Netzsch and Mettler Toledo in thermal analysis but benefits from integration with Waters' core offerings. While Waters lacks the balance sheet strength of its biggest rivals, its innovation pipeline (e.g., advanced MS systems for biopharma) helps maintain pricing power. The company's direct service model and proprietary consumables create sticky revenue streams, but competitors are aggressively moving into software and AI-driven analytics, an area where Waters must accelerate investment to maintain its edge.