A month has gone by since the last earnings report for Waters (WAT Quick QuoteWAT - Free Report) . Shares have added about 6.9% 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 its latest 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 Q3 Earnings Surpass Estimates, Revenue Rise Y/Y

Waters reported third-quarter 2025 non-GAAP earnings of $3.40 per share, beating the Zacks Consensus Estimate by 5.92% and increasing 16% year over year. 

Net sales of $800 million topped the Zacks Consensus Estimate by 2.59%. The figure increased by 8% both on a reported basis and on a constant currency (cc) basis year over year.

Waters’ Q3 Top Line in Detail

WAT operates under two organized segments: Waters and TA. The Waters segment generated sales worth $713.4 million, up 9% both on a reported and cc basis, year over year. Sales in the TA segment were $86.5 million, reflecting year-over-year growth of 2% both on a reported and cc basis.

Products & Services: The division comprises three segments: Instruments, Services, and Chemistry. Instruments sales were $341.5 million, increased 6% on a reported and cc basis, year over year. Services sales were $299.9 million, which increased 8% year over year on a reported basis and 7% at cc. Chemistry sales were $158.5 million, which grew 14% on a reported basis and 13% at cc, year over year. The Services and Chemistry segments jointly generated recurring revenues of $458.4 million, up 10% on a reported basis and 9% at cc, year over year.
 
Waters serves three end markets: Pharmaceutical, Industrial, and Governmental & Academic. The Pharmaceutical market generated sales of $479.8 million, which increased 12% on a year-over-year basis, reportedly and 11% at cc. Industrial sales were $235.7 million, up 3% reportedly and 4% at cc, on a year-over-year basis. Government & Academic sales increased 2% reportedly and 1% at cc to $84.4 million.

Waters’ operating regions include Asia, the Americas and Europe. Asia generated sales of $269.7 million, up 7% and 13% on a reported and cc basis, respectively. Americas sales were $292.8 million, which increased 5% in both reported and cc terms. Europe generated sales of $237.4 million, which increased 13% reportedly and 5% at cc.

WAT’s Q3 Operating Details

In the third quarter of 2025, non-GAAP selling and administrative expenses were $179.7 million, up 8.3% year over year. As a percentage of net sales, the figure was flat on a year-over-year basis.

Research and development expenses of $49.9 million increased 11.7% year over year. As a percentage of net sales, the figure increased 20 bps year over year.

The adjusted operating margin was 30.3%, which contracted 50 bps year over year.

Waters Balance Sheet & Cash Flow

As of Sept. 27, 2025, cash and cash equivalents were $459.1 million, up from $367.2 million as of June 28.

Waters generated cash from operations of $187.3 million in the reported quarter. The company reported a free cash flow of $159.6 million.

WAT Raises 2025 Guidance

Waters raises 2025 cc sales growth guidance between 6.7% and 7.3%. Sales growth on a reported basis is expected in the 6.5%-7.1% range. 

Waters is raising 2025 non-GAAP earnings in the $13.05 to $13.15 per share range. This reflects year-over-year growth of approximately more than 10% to more than 11% and more than 11% to more than 12% on a cc basis.

For the fourth quarter of 2025, Waters expects cc sales growth between 5% and 7%. Sales growth on a reported basis is expected in the 5.2%-7.2% range. 

Waters expects non-GAAP earnings in the $4.45 to $4.55 per share range. This reflects year-over-year growth of approximately more than 9% to more than 11%.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Waters has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Interestingly, 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, Thermo Fisher Scientific (TMO Quick QuoteTMO - Free Report) , a stock from the same industry, has gained 2.3%. The company reported its results for the quarter ended September 2025 more than a month ago.

Thermo Fisher reported revenues of $11.12 billion in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $5.79 for the same period compares with $5.28 a year ago.

Thermo Fisher is expected to post earnings of $6.43 per share for the current quarter, representing a year-over-year change of +5.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Thermo Fisher. Also, the stock has a VGM Score of F.