Waterdrop Inc. (WDH)
Valuation Overview•Is Waterdrop Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Moderate quality score of 59/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
WDH struggles with subpar profitability and pressured margins. This is backed by a fortress balance sheet, holding significant net cash ($1.1B) and minimal debt risk.
The company demonstrates solid revenue growth (11.4% 3Y CAGR) paired with highly explosive earnings growth (114.0% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 8.5%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $838.0M | +39.6% | +11.4% | +5.0% | — | |
| EBITDA | $97.3M | — | -9.2% | — | — | |
| Net Income | $140.2M | +50.6% | -3.1% | — | — | |
| EPS (Diluted) | $0.40 | +1370.0% | +114.0% | — | — | |
| Free Cash Flow | $0.00 | -2.1% | -34.2% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 41.2% | 47.8% | 50.7% | 61.3% |
| Operating Margin | 8.5% | 5.2% | -5.1% | -16.7% |
| Net Margin | 15.0% | 11.3% | 1.3% | -15.6% |
| FCF Margin | — | 9.5% | 4.0% | -16.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | — | $0.04 | — | ||
| Q1'26 | $0.04 | $0.06 | +55.4% | ||
| Q4'25 | $0.04 | $0.06 | +58.2% | ||
| Q3'25 | $0.19 | $0.06 | -68.4% | ||
| Q2'25 | $0.04 | $0.05 | +25.0% | ||
| Q1'25 | — | $0.02 | — | ||
| Q1'25 | $0.03 | $0.04 | +46.0% | ||
| Q4'24 | $0.03 | $0.06 | +100.0% |
Total return is -3.0% (1Y), lagging the benchmark by -28.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -33.2% | -42.5% | — |
| 1Y | -3.0% | -28.0% | +4.5% |
| 3YCAGR | -17.8% | -36.0% | +5.5% |
| 5YCAGR | -27.4% | -39.4% | +2.0% |
| 10YCAGR | -17.7% | -31.0% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Waterdrop Inc. (WDH) valuation, health, and returns.
Based on peer relative multiples, Waterdrop Inc. appears Cheap versus peers compared to industry peers.
Waterdrop Inc. has multiple valuation anchors: Peer Relative Fair Value: $48.43 | Wall Street Analyst Target: $2.00 (implying +61.3% upside). A convergence of these signals offers higher conviction.
Waterdrop Inc. displays fair financial health with a composite quality score of 59/100, supported by a Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 6.6%.
Waterdrop Inc. pays a 41.8% dividend yield, covered by a 24% payout ratio with 1 years of growth, supplemented by a 2.9% buyback yield.
Waterdrop Inc.'s current growth trajectory is Accelerating. The company achieved +39.6% 1Y revenue growth and +1370.0% 1Y EPS growth, compared to its 3Y revenue CAGR of +11.4%.
Wall Street consensus is Buy based on 3 analysts, beating EPS expectations in 67% of recent quarters with a 2-quarter streak. The consensus price target represents a +61.3% change from current levels.
Investment risks for Waterdrop Inc. include: -39.2% 1-year max drawdown. Volatility risk is characterized by a beta of 1.05x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.