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Waters Corporation (WAT)
Intrinsic Value (DCF)
Current$394.59
→
Intrinsic$165.80
-58%
$106.15$165.80$279.20
Market implies 28% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $395, the market prices in continued strong cash flow growth (28%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $106 → Bull $279. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $201 | $221 | $243 | $267 |
| 10% | $137 | $151 | $166 | $182 |
| 12% | $101 | $112 | $123 | $135 |
| 14% | $78 | $87 | $96 | $105 |
Bull Case
- Bull case ($279) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($106) implies 73% downside at 6% growth, 12% discount
- Price reflects 28% growth expectations vs 8% historical — high bar to clear
- Trading 58% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$669.21M
Year 2$722.75M
Year 3$780.57M
Year 4$843.02M
Year 5$910.46M
Terminal$13.40B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$619.64MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.