Waterdrop (NYSE:WDH) has put solid numbers on the table for FY 2025 so far, with third quarter revenue of ¥974.9 million and basic EPS of ¥0.44, alongside trailing 12 month EPS of ¥1.40 supported by net income of ¥506.4 million on revenue of ¥3.25 billion. Over recent quarters the company has seen revenue move from ¥676.2 million in Q2 2024 to ¥753.7 million in Q1 2025 and then to ¥974.9 million in Q3 2025. Basic EPS progressed from ¥0.24 in Q2 2024 to ¥0.30 in Q1 2025 and ¥0.44 in Q3 2025, giving investors a clearer picture of how the top and bottom line have been tracking into the latest release. With a trailing net margin of 15.6% versus 11.9% in the prior year, the story here is about a business that has been converting more of its revenue into profit, which sets the stage for investors to focus on how sustainable those margins look from here.
See our full analysis for Waterdrop.With the headline numbers set, the next step is to see how this earnings profile lines up with the dominant narratives around Waterdrop, highlighting where the recent results reinforce the story and where they raise fresh questions.
See what the community is saying about Waterdrop
TTM earnings growth of 54.9%
- Over the last 12 months, Waterdrop reported earnings growth of 54.9% with trailing net income of ¥506.4 million on ¥3.25b of revenue and a net margin of 15.6% versus 11.9% a year earlier.
- Bulls focus on AI driven efficiency and product expansion, and the trailing numbers give them some backup.
- The bullish view highlights AI deployment and new health products as key drivers, and the recent margin at 15.6% alongside trailing EPS of ¥1.40 shows that recent profitability has supported that story so far.
- At the same time, the most recent 1 year earnings growth of 54.9% sits below the cited 5 year average of 68.4% per year, so anyone leaning on the bullish case needs to decide whether the trailing growth pace or the longer run figure is the better guide.
Bulls argue that Waterdrop's recent profitability and AI driven efficiencies could justify a stronger long term story, and this earnings stretch is a key part of that picture so it is worth seeing how that view is built out in the full narrative 🐂 Waterdrop Bull Case
P/E of 8.1x versus peers at 19.8x
- With a share price of US$1.65 and trailing EPS that translate to a P/E of 8.1x versus a peer average of 19.8x and a US Insurance industry average of 10.8x, Waterdrop is currently trading on lower earnings multiples than those groups.
- Bears point to regulatory and competition pressure, and the current valuation gap reflects those concerns as much as the recent fundamentals.
- The bearish view highlights rising compliance costs and tougher competition, and the lower P/E multiple suggests the market is already pricing in some of that risk even though trailing margins have reached 15.6%.
- Critics also flag possible constraints on AI use and product differentiation, and without forward earnings forecasts in the data, the contrast between a 54.9% trailing earnings growth rate and a P/E of 8.1x leaves readers weighing past execution against those structural headwinds.
Skeptics argue that regulatory and competitive risks could justify the current discount, so it helps to see how that caution is laid out in the full bear case for Waterdrop 🐻 Waterdrop Bear Case
DCF fair value at US$4.09
- The supplied DCF fair value for Waterdrop is US$4.09 per share compared with the current share price of US$1.65, implying the stock trades well below that DCF fair value on the trailing numbers.
- The consensus style narrative around AI spending and margins sits right in the middle of this gap between price and model value.
- Analysts in the balanced view expect revenue to grow 13.1% annually with margins moving from 14.0% to 13.4%, which contrasts with the current 15.6% net margin and 54.9% trailing earnings growth that feed into the DCF fair value of US$4.09.
- What stands out is that the consensus price target of US$2.27, which is closer to the current US$1.65 price, is much lower than the DCF fair value, so readers are effectively choosing between a market aligned target and a higher model based estimate that leans on recent profitability.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Waterdrop on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Given the mix of bullish, bearish and balanced views here, it makes sense to look at the underlying data yourself and decide how convincing each side feels. If you want a clearer view of what investors are optimistic about right now, take a moment to review the 2 key rewards.
See What Else Is Out There
Waterdrop's lower P/E versus peers, slower recent earnings growth compared with its longer run figure, and regulatory concerns suggest the current discount may reflect meaningful risk.
If that mix of uncertainty gives you pause, you can balance it by checking companies screened for resilience and dependable fundamentals through the 75 resilient stocks with low risk scores.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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