Is Waters Corp. overvalued or undervalued?

As of 12 September 2025, the valuation grade for Waters Corp. has moved from attractive to very attractive. Despite this positive change, the company appears to be overvalued based on its current valuation ratios. The P/E ratio stands at 85, significantly higher than peers like ResMed, Inc. with a P/E of 37.73 and Agilent Technologies, Inc. at 27.42. Additionally, the EV to EBITDA ratio for Waters Corp. is 54.96, while GE Healthcare Technologies, Inc. shows a much lower ratio of 12.18, further indicating a premium valuation.
The PEG ratio of 11.06 also suggests that the stock may be overvalued relative to its growth prospects. While Waters Corp. has strong returns on capital with a ROCE of 27.82% and a ROE of 33.82%, these metrics do not sufficiently justify the high valuation ratios. In terms of recent performance, Waters Corp. has underperformed against the S&P 500 on a year-to-date basis, with a return of -17.41% compared to the S&P 500's 12.22%. Overall, the combination of high valuation ratios and underwhelming returns leads to the conclusion that Waters Corp. is overvalued.