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Here's Why Investing In Waters Corp (WAT) Now Makes Sense
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Waters Corporation (WAT - Free Report) has managed to impress investors with its recent earnings streak, as the company’s earnings have trumped estimates in the four trailing quarters. We believe steady demand from pharmaceutical business, solid recurring revenues, strength in Asia as well as modest recovery in industrial markets will continue to be growth drivers, going forward.
Driven by impressive growth drivers, the company’s stock has had an impressive run on the bourse in the past three months. It has appreciated 6.5%, ahead of the industry’s average growth of 2.3%. We believe that the company’s impressive traction across markets and strong product portfolio will drive growth.
Read on to find out the key catalysts for the company right now.
Factors at Play
Waters Corp’s key strengths include leading positions in the pharmaceutical market, broad global customer base and an impressive lineup of products. Over the past few quarters, the company has delivered strong organic growth on the back of continuous operational improvement and judicious use of shareholder capital. Going forward, the company remains confident that modest recovery of industrial markets as well as recurring revenue growth will accelerate growth momentum. In terms of geography, impressive growth of recurring revenues is expected to fuel growth in Asia, which is contributing strongly to the overall top line.
Being one of the leading players in the mass spectrometry market, the company has been gaining significantly from the sale of its advanced mass spectrometry instruments. Further, the company’s global pharmaceuticals business is gaining traction over the last few quarters and fueling growth of Waters Division. Moreover, the company’s Industrial business is proving to be a major profit churner on the back of increasing regulation around food safety and quality, strict conditions for food testing, along with environmental and fine chemical applications.
Moreover, an increased demand for research intensive products, especially the company’s mass spectrometry solutions, is a positive. Moreover, the company is benefiting significantly from both of its LC and LC/MS platforms. This apart, its sound financial health adds to strength.
Despite these positives, the company’s high-debt levels and the consequent interest expenses remain a burden. In recent times, slower budgetary releases in the United States have hurt the pharmaceutical business in the country. Also, during the reported quarter, the company’s sales were limited due to macroeconomic and government policy uncertainties, which seem to be affecting general business activity in the United States.
Moreover, the company is grappling with high R&D expenses and stiff competition, which is hurting revenues as well as margins. This apart, recently, the negative impact of currency translation has reduced sales growth, and this remains a risk for future quarters as well, posing a risk to the company’s financials.
Considering growth drivers and the risks that the company faces, we have a Zacks Rank #3 (Hold) on Waters Corp.
Stocks to Consider
Some better-ranked stocks from the same space include Analog Devices, Inc. (ADI - Free Report) , Avid Technology, Inc. and Nutanix Inc. (NTNX - Free Report) . While Analog Devices sports a Zacks Rank #1 (Strong Buy), Avid Technology and Nutanix carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Analog Devices has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 16.3%.
Avid Technology has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 18.3%.
Nutanix has outpaced estimates in the preceding four quarters, with an average earnings surprise of 18.5 %.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Here's Why Investing In Waters Corp (WAT) Now Makes Sense
Waters Corporation (WAT - Free Report) has managed to impress investors with its recent earnings streak, as the company’s earnings have trumped estimates in the four trailing quarters. We believe steady demand from pharmaceutical business, solid recurring revenues, strength in Asia as well as modest recovery in industrial markets will continue to be growth drivers, going forward.
Driven by impressive growth drivers, the company’s stock has had an impressive run on the bourse in the past three months. It has appreciated 6.5%, ahead of the industry’s average growth of 2.3%. We believe that the company’s impressive traction across markets and strong product portfolio will drive growth.
Read on to find out the key catalysts for the company right now.
Factors at Play
Waters Corp’s key strengths include leading positions in the pharmaceutical market, broad global customer base and an impressive lineup of products. Over the past few quarters, the company has delivered strong organic growth on the back of continuous operational improvement and judicious use of shareholder capital. Going forward, the company remains confident that modest recovery of industrial markets as well as recurring revenue growth will accelerate growth momentum. In terms of geography, impressive growth of recurring revenues is expected to fuel growth in Asia, which is contributing strongly to the overall top line.
Being one of the leading players in the mass spectrometry market, the company has been gaining significantly from the sale of its advanced mass spectrometry instruments. Further, the company’s global pharmaceuticals business is gaining traction over the last few quarters and fueling growth of Waters Division. Moreover, the company’s Industrial business is proving to be a major profit churner on the back of increasing regulation around food safety and quality, strict conditions for food testing, along with environmental and fine chemical applications.
Moreover, an increased demand for research intensive products, especially the company’s mass spectrometry solutions, is a positive. Moreover, the company is benefiting significantly from both of its LC and LC/MS platforms. This apart, its sound financial health adds to strength.
Despite these positives, the company’s high-debt levels and the consequent interest expenses remain a burden. In recent times, slower budgetary releases in the United States have hurt the pharmaceutical business in the country. Also, during the reported quarter, the company’s sales were limited due to macroeconomic and government policy uncertainties, which seem to be affecting general business activity in the United States.
Moreover, the company is grappling with high R&D expenses and stiff competition, which is hurting revenues as well as margins. This apart, recently, the negative impact of currency translation has reduced sales growth, and this remains a risk for future quarters as well, posing a risk to the company’s financials.
Considering growth drivers and the risks that the company faces, we have a Zacks Rank #3 (Hold) on Waters Corp.
Stocks to Consider
Some better-ranked stocks from the same space include Analog Devices, Inc. (ADI - Free Report) , Avid Technology, Inc. and Nutanix Inc. (NTNX - Free Report) . While Analog Devices sports a Zacks Rank #1 (Strong Buy), Avid Technology and Nutanix carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Analog Devices has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 16.3%.
Avid Technology has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 18.3%.
Nutanix has outpaced estimates in the preceding four quarters, with an average earnings surprise of 18.5 %.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>