A month has gone by since the last earnings report for Waters (WAT Quick QuoteWAT - Free Report) . Shares have lost about 8.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Waters due for a breakout? Well, first let's take a quick look at the 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 Q4 Earnings Surpass Estimates, Revenue Rise Y/Y

Waters reported fourth-quarter 2025 non-GAAP earnings of $4.53 per share, which beat the Zacks Consensus Estimate by 0.67% and increased 10.5% year over year. 

Net sales of $932.4 million topped the Zacks Consensus Estimate by 0.55%. The figure increased by 7% on a reported basis and 6% on a constant currency (cc) basis year over year.

Waters’ Q4 Top Line in Detail

WAT operates under two organized segments: Waters and TA. The Waters segment generated sales worth $823.9 million, up 8% on a reported basis and 7% on a cc basis, year over year. Sales in the TA segment were $108.4 million, flat year over year on both a reported and cc basis.

Products & Services: The division comprises three segments: Instruments, Services and Chemistry. Instrument sales were $432.9 million, up 3% year over year on a reported and cc basis. Services sales were $329.1 million, which increased 9% year over year on a reported basis and 8% at cc. Chemistry sales were $170.3 million, which grew 13% on a reported basis and 12% at cc, year over year. The Services and Chemistry segments jointly generated recurring revenues of $499.5 million, up 10% year over year on a reported basis and 9% at cc.

Waters serves three end markets: Pharmaceutical, Industrial, and Governmental & Academic. The Pharmaceutical market generated sales of $540.6 million, which increased 8% on a year-over-year basis, reportedly, and 7% at cc. Industrial sales were $284.5 million, up 8% year over year on a reported and cc basis. Government & Academic sales decreased 2% reportedly and 3% at cc to $107.3 million.

Waters’ operating regions include Asia, the Americas and Europe. Asia generated sales of $283.9 million, up 4% and 11% on a reported and cc basis, respectively. Americas sales were $332.4 million, which increased 4% in both reported and cc terms. Europe generated sales of $315.9 million, which increased 13% reportedly and 4% at cc.

WAT’s Q4 Operating Details

In the fourth quarter of 2025, non-GAAP selling and administrative expenses were $191 million, up 13.3% year over year. As a percentage of net sales, the figure increased 120 basis points (bps) on a year-over-year basis.

Research and development expenses of $50.1 million, up 8.3% year over year. As a percentage of net sales, the figure expanded 10 bps year over year.

The adjusted operating margin was 35.2%, which contracted 20 bps year over year.

Waters Balance Sheet & Cash Flow

As of Dec. 31, 2025, cash and cash equivalents were $587.8 million, up from $459.1 million as of Sept. 27.

Waters generated cash from operations of $164.5 million in the reported quarter. The company reported a free cash flow of $125.2 million.

WAT Offers Q126 and FY26 Guidance

Waters expects first-quarter sales growth between 7% and 9% on a cc basis. Sales on an organic reported basis and reported basis are expected to be in the range of $718-$731 million and $1.19 billion to $1.21 billion, respectively.

Waters expects first-quarter 2026 non-GAAP earnings to be in the range of $2.25-$2.35 per share. This indicates year-over-year growth of approximately 0.0% to 4.4%.

For 2026, Waters expects cc sales growth between 5.5% and 7%. Sales on an organic reported basis and reported basis are expected to be in the range of $3.35-$3.40 billion and $6.40 billion to $6.45 billion, respectively.

Waters expects non-GAAP earnings in the $14.30 to $14.50 per share range. This reflects year-over-year growth of approximately 8.9% to 10.4%.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -9.42% due to these changes.

VGM Scores

At this time, Waters has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. 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 #2 (Buy). We expect an above average 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, Hologic (HOLX Quick QuoteHOLX - Free Report) , a stock from the same industry, has gained 0.5%. The company reported its results for the quarter ended December 2025 more than a month ago.

Hologic reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $1.04 for the same period compares with $1.03 a year ago.

Hologic is expected to post earnings of $1.08 per share for the current quarter, representing a year-over-year change of +4.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Hologic has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.