A month has gone by since the last earnings report for Waters (WAT Quick QuoteWAT - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Waters due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Waters Corporation before we dive into how investors and analysts have reacted as of late.

Waters Q2 Earnings Surpass Estimates, Revenue Rise Y/Y

Waters Corporation reported second-quarter 2025 non-GAAP earnings of $2.95 per share, beating the Zacks Consensus Estimate by 0.68% and increasing 12% year over year.

Net sales of $771.33 million topped the Zacks Consensus Estimate by 3.63%. The figure increased 9% on a reported basis and 8% on a constant currency (cc) basis year over year.

Waters’ Q2 Top Line in Detail

WAT operates under two organized segments: Waters and TA.

The Waters segment (89.3% of net sales) generated sales worth $688.8 million, up 11% and 10% on a year-over-year and CC basis, respectively. Sales in the TA segment were $82.4 million (10.7%), reflecting a year-over-year decline of 4%, but increasing 6% at cc.

Products & Services: The division comprises three segments: Instruments, Services, and Chemistry.

Instruments sales (40% of net sales) were $308.4 million, increased 5% on a year-over-year basis and 4% at cc. Services registered sales (38.6% of net sales) worth $297.9 million, climbing 9% year over year and at cc. Chemistry sales (21.4% of net sales) were $165 million, growing 17% year over year and 16% at cc.

The Services and Chemistry segments jointly generated recurring revenues of $462.9 million, up 12% year over year and 11% at cc.

Markets: Waters serves three end markets: Pharmaceutical, Industrial, and Governmental & Academic.

The Pharmaceutical market (59.9% of net sales) generated sales of $462 million, which increased 11% on a year-over-year and at cc. The Industrial market’s (30.8% of net sales) sales were $237.7 million, up 7.3% year over year and 6% at cc. The Academic & Government market (9.3% of net sales) generated $71.7 million in sales, which remained flat year over year and decreased 3% at cc.

Geography: Waters’ operating regions include Asia, the Americas and Europe. 

Asia (34.5% of net sales) generated $265.9 million in sales, up 12% and 14% on a year-over-year and cc basis, respectively. Sales in the Americas (36.4% of net sales) generated $280.7 million, which increased 2% in both year-over-year and cc terms. Europe (29.1% of net sales) generated $224.6 million in sales, which increased 14% year over year and 8% at cc.

WAT’s Q2 Operating Details

In the second quarter of 2025, non-GAAP selling and administrative expenses were $177.1 million, up 5.2% year over year. As a percentage of net sales, the figure contracted 80 basis points (bps) on a year-over-year basis.

Research and development spending of $48.5 million increased 8.1% year over year. As a percentage of net sales, the figure was in line year over year.

The adjusted operating margin was 29.1%, which contracted 10 bps year over year.

Waters Balance Sheet & Cash Flow

As of June 28, 2025, cash and cash equivalents were $367.2 million, up from $382.9 million as of March 31, 2025.

Waters generated cash from operations of $41.14 million in the reported quarter, down from $54.5 million in the year-ago quarter.

WAT recorded a free cash flow of $158.6 million in the second quarter of 2025.

WAT Raised Guidance

For the third quarter of 2025, Waters expects non-GAAP earnings of $3.15-$3.25 per share, indicating year-over-year growth of approximately 8% to 11%.

Waters anticipates sales to grow 5-7% on a cc basis after adequately discounting recent policy developments in the United States.
 
On a reported basis, total sales growth is predicted to be in the range of 4.5-6.5% backed by the strong second quarter and tailwinds from favorable forex.

For 2025, Waters anticipates non-GAAP earnings between $12.95 and $13.05 per share, indicating a year-over-year growth of approximately 9% to 10%, and 10% to 11% on a constant currency basis.

On a reported basis, total sales are suggested to improve in the range of 5 % to 7% while at cc sales are expected to increase between 5.5% and 7.5%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Waters has a subpar Growth Score of D, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Waters has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Waters is part of the Zacks Medical - Instruments industry. Over the past month, Teleflex (TFX Quick QuoteTFX - Free Report) , a stock from the same industry, has gained 10.6%. The company reported its results for the quarter ended June 2025 more than a month ago.

Teleflex reported revenues of $780.89 million in the last reported quarter, representing a year-over-year change of +4.2%. EPS of $3.73 for the same period compares with $3.42 a year ago.

Teleflex is expected to post earnings of $3.41 per share for the current quarter, representing a year-over-year change of -2.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Teleflex. Also, the stock has a VGM Score of C.