Waterdrop

WDH

Insurance - Brokers · Financial Services

Price

$1.18

+0.00 (+0.00%)

Market Cap

$426.8M

Exchange

New York Stock Exchange

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−90.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 394.3M (2021) → 37.1M (2025)

Waterdrop Inc. is a Chinese company that helps people buy health and life insurance online. It runs a digital platform where regular consumers can browse, compare, and purchase insurance policies from various insurance companies. Waterdrop also operates a medical crowdfunding service, where people facing serious illnesses can raise money from the public to help pay for treatment.

The company makes money primarily by earning commissions when customers buy insurance policies through its platform — it does not underwrite the policies itself. Waterdrop operates almost entirely in China, where it has built a large user base through its crowdfunding service, which acts as a funnel to introduce people to insurance products. The main growth driver is China's underpenetrated health insurance market, where demand for affordable coverage is rising, but the key risk is heavy regulatory scrutiny from Chinese authorities over both the insurance brokerage and online fundraising industries.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+63.8% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+800.0% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$226M/ year

→ Flat (+5% vs prior year)

5.8% of revenue

In line with sector average (7%)

Steady R&D investment year-over-year

Insider Activity

2.0%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$4.2B cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Waterdrop grew revenue 64% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

60.8%

Premium pricing power — 60.8% gross margin

Operating Margin

6.4%

Modest — 6.4% operating margin

ROCE

1.5%

Weak — 1.5% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+57.4%

Fast-growing sales (57.4% YoY)

EPS YoY

+662.5%

Earnings growing fast (662.5% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

Weak — only 0% of profit becomes cash

FCF Margin

0.0%

Thin free cash flow (0.0%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.05

Conservative — low debt load (0.05)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

0.1x

Attractive valuation — P/E 0.1

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

-0.8

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield

5.31%

Healthy income — 5.31% yield

Generous yield. Worth checking whether the payout is sustainable.

Dividend Growth

N/A

no trend

Data not available

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