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Advanced Drainage Systems
(NYSE:WMS)
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Rating:65Neutral
Price Target:
$137.00
▼(-1.30% Downside)
Action:Reiterated
Date:10/05/26
The score is driven primarily by strong operating profitability and cash generation, plus solid Q1 execution and reiterated FY27 guidance. Offsetting factors are the balance-sheet cushion risk flagged by very low latest equity and a clearly negative technical setup (price below key moving averages with negative MACD), while valuation appears fair rather than compelling and the dividend yield is small.
Positive Factors
Strong growth and profitability
Strong margins and continued revenue expansion demonstrate solid earnings power across ADS’s water-management portfolio. Record quarterly sales and healthy profitability provide resources to support investment, absorb normal cost volatility, and reinforce the company’s position over the coming quarters.
Negative Factors
Weak latest equity cushion
Although historical leverage metrics appear moderate, the latest very low equity balance leaves less protection against asset write-downs or an operating downturn. This increases balance-sheet sensitivity and could constrain financial flexibility if conditions weaken or acquisition funding needs rise.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong growth and profitability
Strong margins and continued revenue expansion demonstrate solid earnings power across ADS’s water-management portfolio. Record quarterly sales and healthy profitability provide resources to support investment, absorb normal cost volatility, and reinforce the company’s position over the coming quarters.
Read all positive factors
Advanced Drainage Systems (WMS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.64B
Dividend Yield0.59%
Average Volume (3M)778.48K
Price to Earnings (P/E)21.9
Beta (1Y)1.12
Revenue Growth10.37%
EPS Growth4.62%
CountryUS
Employees6,425
SectorIndustrials
Sector Strength72
IndustryConstruction Materials
Share Statistics
EPS (TTM)5.83
Shares Outstanding75,405,340
10 Day Avg. Volume825,511
30 Day Avg. Volume778,480
Financial Highlights & Ratios
PEG Ratio-4.41
Price to Book (P/B)5.52
Price to Sales (P/S)3.50
P/FCF Ratio18.74
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue4.28
Enterprise Value/Gross Profit11.37
Enterprise Value/Ebitda14.87
Forecast
1Y Price Target
$188.63Price Target Upside35.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)6.25
Revenue Forecast (FY)$3.43B
Advanced Drainage Systems Business Overview & Revenue Model
Company Description
Advanced Drainage Systems, Inc., established in Hilliard, Ohio in 1966, is a leading provider of innovative water management solutions. The company specializes in the design, manufacturing, and global distribution of thermoplastic corrugated pipes...
How the Company Makes Money
Advanced Drainage Systems primarily makes money by manufacturing and selling water management products—most importantly thermoplastic pipe systems—into non-residential infrastructure, residential construction, and agricultural/onsite markets. Reve...
Advanced Drainage Systems Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call highlighted a very strong fiscal first quarter with record revenue, robust adjusted EBITDA and margin expansion, strong free cash flow and successful early integration of the NDS acquisition. Those positives were balanced against clear near-term headwinds from higher procured resin and transportation costs, expected sequential margin pressure in Q2–Q3, and some residential market softness. Management has pricing and recycling levers and expects to offset inflation on a full-year dollar-for-dollar basis, though timing will create short-term cadence and margin volatility.Positive Updates
Record Quarterly Revenue
First quarter revenue exceeded $1.0 billion for the first time, increasing 21% year-over-year.
Negative Updates
Inflationary Material Cost Pressure
Raw material costs were significantly higher year-over-year and are expected to peak in Q2–Q3; management expects these to be a significant headwind for the remainder of the year despite pricing actions.
Read all updates
Q1-2027 Updates
Positive
Negative
Record Quarterly Revenue
First quarter revenue exceeded $1.0 billion for the first time, increasing 21% year-over-year.
Read all positive updates
Company Guidance
Management reiterated FY27 guidance of net sales $3.350–$3.550 billion and adjusted EBITDA $1.00–$1.05 billion, while noting normal seasonality (55–60% of revenue in H1) but with Q1 including $25–$30 million of pull‑ahead; they expect pricing to offset inflationary costs dollar‑for‑dollar for the year even as resin costs peak in Q2–Q3 and transportation costs remain elevated, and warned Q2 EBITDA margin will be worse than the typical ~300 bp sequential decline from Q1. Q1 actuals included record revenue just over $1.0 billion (up 21% YoY), organic sales ex‑NDS +9% (mid‑single‑digit after adjusting for pull‑ahead), adjusted EBITDA $358 million (35.8% margin), free cash flow $203 million and NDS contribution of $95 million; liquidity and capital posture: net leverage ~1.5x (target 2x), available liquidity ~$901 million, planned FY capex ≈ $200 million, 1.5M shares repurchased in Q1, and continued focus on strategic M&A and disciplined capital returns.Advanced Drainage Systems Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
56
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.22B | 3.05B | 2.90B | 2.87B | 3.07B | 2.77B |
| Gross Profit | 1.21B | 1.11B | 1.09B | 1.15B | 1.12B | 800.38M |
| EBITDA | 927.26M | 874.92M | 864.55M | 910.52M | 872.43M | 558.87M |
| Net Income | 451.06M | 426.46M | 450.17M | 509.92M | 507.09M | 271.33M |
Balance Sheet | ||||||
| Total Assets | 4.51B | 4.51B | 3.69B | 3.27B | 2.90B | 2.65B |
| Cash, Cash Equivalents and Short-Term Investments | 162.25M | 223.01M | 463.32M | 490.16M | 217.13M | 20.13M |
| Total Debt | 1.77B | 1.79B | 1.45B | 1.37B | 1.34B | 958.84M |
| Total Liabilities | 2.62B | 2.55B | 2.05B | 1.99B | 1.91B | 1.54B |
| Stockholders Equity | 1.86B | 1.93B | 1.62B | 1.26B | 977.37M | 1.09B |
Cash Flow | ||||||
| Free Cash Flow | 550.15M | 569.29M | 368.55M | 534.12M | 540.90M | 125.81M |
| Operating Cash Flow | 804.47M | 819.05M | 581.49M | 717.93M | 707.81M | 274.89M |
| Investing Cash Flow | -1.20B | -1.21B | -447.87M | -155.66M | -214.48M | -198.83M |
| Financing Cash Flow | -81.16M | 156.32M | -157.73M | -284.34M | -296.28M | -251.07M |
Advanced Drainage Systems Technical Analysis
Negative
138.81
Price Trends
133.14
Negative
138.15
Negative
144.18
Negative
Market Momentum
-1.42
Negative
46.77
Neutral
58.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMS, the sentiment is Negative. The current price of 138.81 is above the 20-day moving average (MA) of 128.12, above the 50-day MA of 133.14, and below the 200-day MA of 144.18, indicating a bearish trend. The MACD of -1.42 indicates Negative momentum. The RSI at 46.77 is Neutral, neither overbought nor oversold. The STOCH value of 58.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WMS.
Advanced Drainage Systems Risk Analysis
Advanced Drainage Systems disclosed 28 risk factors in its most recent earnings report. Advanced Drainage Systems reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Advanced Drainage Systems Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $940.88M | 19.29 | 12.16% | ― | 15.12% | 50.31% | |
71 Outperform | $55.34B | 14.65 | 16.26% | 1.85% | 6.29% | 18.35% | |
68 Neutral | $7.23B | 14.73 | 18.16% | 0.14% | 2.59% | 42.29% | |
65 Neutral | $9.64B | 21.92 | 23.40% | 0.59% | 10.37% | 4.62% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $20.78B | 24.15 | 10.79% | 1.74% | 5.09% | 1.61% | |
55 Neutral | $2.81B | 20.15 | 8.72% | ― | 12.13% | -8.86% |
* Industrials Sector Average
WMS
Advanced Drainage Systems
127.78
-15.58
-10.87%
NWPX
Northwest Pipe Company
97.63
43.62
80.76%
CRH
CRH plc
83.18
-33.36
-28.63%
ACA
Arcosa
147.33
52.74
55.75%
KNF
Knife River Corporation
49.58
-14.99
-23.22%
AMRZ
Amrize Ltd
37.99
-10.45
-21.57%
Advanced Drainage Systems Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Advanced Drainage Systems Acquires StormTrap to Expand Stormwater Solutions
Positive
Oct 5, 2026
On October 1, 2026, Advanced Drainage Systems agreed to acquire StormTrap Investments, a North American provider of large-volume, space-constrained, highly engineered stormwater solutions, for about $530 million, or roughly $450 million net of exp...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Advanced Drainage Systems Declares Dividend and Highlights Buybacks
Positive
Aug 6, 2026
Advanced Drainage Systems reported strong results for the first quarter of fiscal 2027 ended June 30, 2026, with net sales rising 20.6% to $1.0 billion and net income from continuing operations up 22.5% to $176.6 million, driven by organic growth,...
Executive/Board ChangesShareholder Meetings
Advanced Drainage Systems Holds 2026 Annual Shareholder Meeting
Positive
Jul 17, 2026
On July 16, 2026, Advanced Drainage Systems held its 2026 Annual Meeting of Stockholders via live webcast, allowing shareholders to participate and vote remotely. Stockholders elected nine directors, including D. Scott Barbour and eight other nomi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.