Advanced Drainage Systems (WMS) AI Stock Analysis

• Market Cap: $10.48B
• Dividend Yield: 0.5%
• Average Volume (3M): 672.69K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.37
• Revenue Growth: 2.48%
• EPS Growth: -6.92%
• Country: US
• Employees: 5,705
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 1.97
• Shares Outstanding: 77,752,610
• 10 Day Avg. Volume: 849,461
• 30 Day Avg. Volume: 672,687
• PEG Ratio: -1.72
• Price to Book (P/B): 5.21
• Price to Sales (P/S): 2.90
• P/FCF Ratio: 22.86
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $172.17
• Price Target Upside: 16.32% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $164.00 ▲(10.80% Upside)

Advanced Drainage Systems receives a strong score due to its solid financial performance and positive earnings call, which highlight strategic growth and profitability. While technical indicators show a positive trend, valuation metrics suggest moderate attractiveness. Potential risks in the residential market and demand uncertainties are notable but do not overshadow the company's strengths.

Positive Factors

Revenue Growth

The 9% revenue growth in a challenging market underscores the company's ability to expand its market reach and product adoption, indicating strong business fundamentals.

Acquisition Strategy

The acquisition of NDS is a strategic move to broaden product offerings and market opportunities, potentially driving long-term growth and competitive advantage.

Cash Flow Management

Positive free cash flow growth indicates robust cash generation, enabling the company to invest in growth opportunities and maintain financial stability.

Negative Factors

Residential Market Challenges

Challenges in the residential market due to high interest rates may impact demand, posing risks to revenue growth in this segment.

Revenue Decline

A 4.3% revenue decline indicates potential challenges in maintaining growth, which could affect the company's long-term revenue trajectory.

Increased SG&A Costs

Rising SG&A costs due to acquisitions could pressure margins, affecting profitability if not managed effectively.

Advanced Drainage Systems Business Overview & Revenue Model

Company Description

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products, and drainage solutions for use in the underground construction and infrastructure marketplace in the United States, Canada, Mexico, and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems, EZflow synthetic aggregate bundles, mechanical aeration wastewater solutions, septic tanks and accessories, and combined treatment and dispersal systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. It offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of approximately 38 distribution centers. The company was incorporated in 1966 and is headquartered in Hilliard, Ohio.

How the Company Makes Money

Advanced Drainage Systems generates revenue through the production and sale of its extensive product line, which includes various types of drainage pipes, fittings, and geosynthetic materials. The company primarily serves contractors, engineers, and municipalities involved in construction and infrastructure projects. Key revenue streams are derived from direct sales to these customers, as well as distribution partnerships with wholesalers and retailers. Additionally, the company may benefit from government contracts and public sector projects focused on infrastructure development and environmental management. Factors contributing to its earnings include a strong focus on innovation, a robust supply chain, and strategic acquisitions that enhance its product offerings and market reach.

Advanced Drainage Systems Financial Statement Overview

Summary

Advanced Drainage Systems demonstrates solid financial health with strong profitability and cash flow generation. Effective leverage management is evident, but reliance on debt and recent fluctuations in revenue growth require close monitoring. Maintaining margins and managing debt will be crucial for sustaining long-term growth.

Income Statement

Advanced Drainage Systems has shown consistent revenue growth over the years, with a slight dip in the most recent TTM period. The company maintains healthy gross and net profit margins, indicating strong profitability. However, the recent decline in revenue growth rate and slight decrease in margins from the previous year suggest potential challenges in sustaining growth momentum.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio, which has improved over time, indicating better leverage management. Return on equity remains strong, showcasing efficient use of equity to generate profits. However, the relatively low equity ratio suggests a reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

The cash flow statement reveals a robust operating cash flow to net income ratio, highlighting strong cash generation relative to earnings. Free cash flow growth has been positive in the latest TTM period, indicating improved cash management. The free cash flow to net income ratio is healthy, suggesting good cash conversion efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.85B	2.90B	2.87B	3.07B	2.77B	1.98B
Gross Profit	1.05B	1.09B	1.15B	1.12B	800.38M	690.08M
EBITDA	753.70M	864.55M	907.39M	868.46M	554.55M	493.51M
Net Income	395.64M	450.17M	509.92M	507.09M	271.33M	224.23M
Balance Sheet
Total Assets	4.08B	3.69B	3.27B	2.90B	2.65B	2.41B
Cash, Cash Equivalents and Short-Term Investments	812.86M	463.32M	490.16M	217.13M	20.13M	195.01M
Total Debt	1.43B	1.45B	1.37B	1.34B	958.84M	850.50M
Total Liabilities	2.15B	2.05B	1.99B	1.91B	1.54B	1.35B
Stockholders Equity	82.57M	1.62B	1.26B	977.37M	1.09B	1.05B
Cash Flow
Free Cash Flow	529.23M	368.55M	534.12M	540.90M	125.81M	373.46M
Operating Cash Flow	741.01M	581.49M	717.93M	707.81M	274.89M	452.22M
Investing Cash Flow	-441.67M	-447.87M	-155.66M	-214.48M	-198.83M	-77.87M
Financing Cash Flow	-98.94M	-157.73M	-284.34M	-296.28M	-251.07M	-354.58M

Advanced Drainage Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 148.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMS, the sentiment is Positive. The current price of 148.02 is above the 20-day moving average (MA) of 140.84, above the 50-day MA of 141.25, and above the 200-day MA of 122.84, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 61.44 is Neutral, neither overbought nor oversold. The STOCH value of 49.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WMS.

Advanced Drainage Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMS	74 Outperform	$10.48B	24.32	27.09%	0.50%	2.48%	-6.92%
FBIN	65 Neutral	$6.09B	18.93	13.72%	1.99%	-3.78%	-24.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BLDR	61 Neutral	$12.34B	20.75	13.56%	―	-6.44%	-48.84%
MAS	53 Neutral	$13.08B	16.14	―	2.00%	-3.62%	3.41%
OC	51 Neutral	$9.29B	―	-3.27%	2.65%	3.47%	-148.53%

Advanced Drainage Systems Corporate Events

Advanced Drainage Systems Reports Strong Q2 Fiscal 2026 Results

Advanced Drainage Systems, Inc. is a leading manufacturer of innovative stormwater and onsite wastewater solutions, operating primarily in the water management sector with a focus on sustainability and recycling.

Advanced Drainage Systems Reports Strong Q2 2026 Results

On November 6, 2025, Advanced Drainage Systems announced its second quarter fiscal 2026 results, highlighting a net sales increase of 8.7% to $850.4 million and a net income rise of 19.3% to $156.5 million. The company attributed its strong performance to strategic sales initiatives, acquisitions, and a favorable product mix, despite a challenging macroeconomic environment. Additionally, ADS announced a cash dividend of $0.18 per share and an acquisition of NDS, which is expected to enhance its product offerings and market reach.

The most recent analyst rating on (WMS) stock is a Buy with a $159.00 price target. To see the full list of analyst forecasts on Advanced Drainage Systems stock, see the WMS Stock Forecast page.

Advanced Drainage Systems Acquires National Diversified Sales

On September 23, 2025, Advanced Drainage Systems announced a definitive agreement to acquire National Diversified Sales (NDS), the water management business of Norma Group SE, for approximately $1 billion in an all-cash transaction. This acquisition is expected to enhance ADS’s product offerings, expand its market reach, and unlock significant value creation potential with over $25 million in expected annual cost synergies. The transaction, which aligns with ADS’s growth strategies, is anticipated to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals.

The most recent analyst rating on (WMS) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Advanced Drainage Systems stock, see the WMS Stock Forecast page.

Advanced Drainage Systems’ Resilient Earnings Amid Challenges

The recent earnings call for Advanced Drainage Systems conveyed a sentiment of resilience and cautious optimism. Despite facing a challenging demand environment and adverse weather conditions that impacted project timelines, the company demonstrated strong profitability and growth in specific segments. The discussion highlighted robust margins, cash flow, and innovation efforts, although mixed demand signals and infrastructure revenue challenges were also noted.

Advanced Drainage Systems Reports Q1 Fiscal 2026 Results

Advanced Drainage Systems, Inc. (ADS) is a leading provider of innovative water management solutions, specializing in stormwater and onsite wastewater industries. The company is recognized for its extensive manufacturing network and commitment to sustainability as one of North America’s largest plastic recycling companies.

Advanced Drainage Systems Reports Q1 2026 Financial Results

On August 7, 2025, Advanced Drainage Systems announced its fiscal first quarter results for 2026, revealing a 1.8% increase in net sales to $829.9 million, despite a decrease in net income by 11.2% to $144.1 million. The company highlighted strong execution amid challenging conditions, with investments in engineering and new product offerings like the Arcadia stormwater separator. The acquisition of River Valley Pipe and Orenco Systems contributed to growth, while the company remains focused on long-term profitability and market expansion.

The most recent analyst rating on (WMS) stock is a Buy with a $195.00 price target. To see the full list of analyst forecasts on Advanced Drainage Systems stock, see the WMS Stock Forecast page.