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Advanced Drainage Systems
(NYSE:WMS)
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Rating:67Neutral
Price Target:
$151.00
▼(-1.55% Downside)
Action:Reiterated
Date:06/19/26
The score is driven primarily by strong operating profitability and cash generation, supported by a generally positive earnings outlook and NDS integration progress. Offsetting factors are balance-sheet risk from thinner equity and leverage, a mixed technical backdrop with weak longer-term trend positioning, and a valuation that looks full relative to a low dividend yield.
Positive Factors
Higher‑value product mix & breadth
A growing share of revenue from higher‑margin stormwater, allied and specialty lines improves structural profitability. Broad product breadth and cross‑sell across ADS, NDS and Infiltrator brands increase customer stickiness and reduce reliance on commodity pipe volumes.
Negative Factors
Thin reported equity & leverage
A much thinner equity base magnifies leverage metrics and volatility in returns, reducing financial flexibility. Elevated indebtedness constrains capacity for opportunistic investment or large buybacks and increases refinancing and covenant risk in adverse demand scenarios.
Read all positive and negative factors
Positive Factors
Negative Factors
Higher‑value product mix & breadth
A growing share of revenue from higher‑margin stormwater, allied and specialty lines improves structural profitability. Broad product breadth and cross‑sell across ADS, NDS and Infiltrator brands increase customer stickiness and reduce reliance on commodity pipe volumes.
Read all positive factors
Advanced Drainage Systems (WMS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.66B
Dividend Yield0.47%
Average Volume (3M)1.00M
Price to Earnings (P/E)27.8
Beta (1Y)1.19
Revenue Growth5.03%
EPS Growth-5.49%
CountryUS
Employees5,705
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)5.48
Shares Outstanding76,645,386
10 Day Avg. Volume1,308,645
30 Day Avg. Volume1,003,255
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 Cap1.05
Enterprise Value/Revenue4.01
Enterprise Value/Gross Profit10.77
Enterprise Value/Ebitda14.06
Forecast
1Y Price Target
$183.00Price Target Upside19.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)6.29
Revenue Forecast (FY)$3.45B
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 makes money primarily by manufacturing and selling water management products to contractors, distributors, and infrastructure-related customers. Its largest revenue stream is product sales of plastic drainage pipe—especia...
Advanced Drainage Systems Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call portrays a broadly positive financial and strategic picture: robust revenue and margins, strong free cash flow and balance-sheet metrics, successful close and early integration of the $1.0B NDS acquisition with expected synergies, and clear FY27 guidance. Principal risks include near-term inflationary pressures (diesel and carrier rates), choppy demand with pull-forward buying that could create short-term 'air pockets,' regional competitive pressure versus concrete, and softness in single-family residential and agriculture. Management has multiple operational levers (recycling, internal fleet, pricing actions, SG&A management) and a conservative, cash-focused approach that support confidence in navigating the headwinds.Positive Updates
Strong Q4 and Fiscal Year Financial Performance
Q4 revenue increased 10% to $677 million (including NDS). Adjusted EBITDA increased 6% in Q4 with a 27.8% adjusted EBITDA margin. Full-year adjusted EBITDA margin was 31.6% (second-highest in company history).
Negative Updates
Residential and Pipe Pressure
Pipe revenue decreased 2% in Q4. Residential sales increased 18% including NDS, but excluding NDS residential sales declined 1%. Management highlighted single-family housing headwinds from affordability and interest rates and expects a slightly more negative outlook for single-family housing in FY27.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Q4 and Fiscal Year Financial Performance
Q4 revenue increased 10% to $677 million (including NDS). Adjusted EBITDA increased 6% in Q4 with a 27.8% adjusted EBITDA margin. Full-year adjusted EBITDA margin was 31.6% (second-highest in company history).
Read all positive updates
Company Guidance
ADS guided fiscal 2027 revenue of $3.35–$3.55 billion and adjusted EBITDA of $1.0–$1.05 billion (including roughly $300 million of full‑year NDS revenue), assuming significant year‑over‑year input‑material and transportation inflation that management plans to offset dollar‑for‑dollar with pricing; the company expects normal seasonality (~55% of revenue in 1H) though Q1 may be elevated by pre‑buy activity. The guide assumes roughly flat volumes with modest resilience in nonresidential and softer agriculture and single‑family housing, factors SG&A near ~14% of sales, and targets staying below 2.0x leverage (ended FY26 at ~1.6x; weighted‑average cost of debt ~5.65%; weighted‑average maturities >6 years). Management anchored the outlook to FY26 operating performance, citing Q4 adjusted EBITDA margin of 27.8% and full‑year margin of 31.6%, $569 million free cash flow (vs. $369M prior year), $819M cash from operations (~85% conversion), $250M capex, $1.4B capital deployed (≈$1.2B for growth including ~$1.0B for NDS), $155M returned to shareholders, and recent repurchase activity (720k shares in Q4 and ~ $200M repurchase executed).Advanced Drainage Systems Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
52
Neutral
Cash Flow
79
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.05B | 2.90B | 2.87B | 3.07B | 2.77B |
| Gross Profit | 1.11B | 1.09B | 1.15B | 1.12B | 800.38M |
| EBITDA | 872.49M | 864.55M | 910.52M | 872.43M | 558.87M |
| Net Income | 426.46M | 450.17M | 509.92M | 507.09M | 271.33M |
Balance Sheet | |||||
| Total Assets | 4.51B | 3.69B | 3.27B | 2.90B | 2.65B |
| Cash, Cash Equivalents and Short-Term Investments | 223.01M | 463.32M | 490.16M | 217.13M | 20.13M |
| Total Debt | 1.79B | 1.45B | 1.37B | 1.34B | 958.84M |
| Total Liabilities | 2.55B | 2.05B | 1.99B | 1.91B | 1.54B |
| Stockholders Equity | 1.93B | 1.62B | 1.26B | 977.37M | 1.09B |
Cash Flow | |||||
| Free Cash Flow | 569.29M | 368.55M | 534.12M | 540.90M | 125.81M |
| Operating Cash Flow | 819.05M | 581.49M | 717.93M | 707.81M | 274.89M |
| Investing Cash Flow | -1.21B | -447.87M | -155.66M | -214.48M | -198.83M |
| Financing Cash Flow | 156.32M | -157.73M | -284.34M | -296.28M | -251.07M |
Advanced Drainage Systems Technical Analysis
Positive
153.37
Price Trends
141.93
Positive
146.82
Positive
146.77
Positive
Market Momentum
4.21
Negative
58.76
Neutral
78.65
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 153.37 is above the 20-day moving average (MA) of 142.42, above the 50-day MA of 141.93, and above the 200-day MA of 146.77, indicating a bullish trend. The MACD of 4.21 indicates Negative momentum. The RSI at 58.76 is Neutral, neither overbought nor oversold. The STOCH value of 78.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
67 Neutral | $11.66B | 27.77 | 22.43% | 0.47% | 5.03% | -5.49% | |
67 Neutral | $16.70B | 20.49 | -566.50% | 1.94% | -0.31% | 10.03% | |
65 Neutral | $12.16B | -22.61 | -12.50% | 2.43% | -12.20% | -333.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $6.35B | 23.65 | 11.48% | 1.91% | -2.01% | -34.26% | |
59 Neutral | $9.11B | 32.20 | 6.92% | ― | -8.33% | -66.48% |
* Industrials Sector Average
WMS
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Advanced Drainage Systems Corporate Events
Business Operations and Strategy
Advanced Drainage Systems Showcases Strategy at 2026 Investor Day
Positive
Jun 18, 2026
Advanced Drainage Systems, Inc., a major producer of stormwater and onsite wastewater solutions for commercial, residential, infrastructure and agricultural uses, leverages a broad manufacturing footprint, a large company-owned logistics fleet and...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Advanced Drainage Systems realigns segments, shifts to EBITDA
Neutral
May 21, 2026
Advanced Drainage Systems has reorganized its internal reporting structure following the acquisition of National Diversified Sales, realigning its reportable segments into Stormwater and Wastewater for the fiscal year ended March 31, 2026. The com...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Advanced Drainage Systems Posts Strong FY2026 Results, Dividend
Positive
May 21, 2026
Advanced Drainage Systems reported on May 21, 2026, that fourth-quarter net sales for the period ended March 31, 2026 rose 9.9% to $676.8 million, driven by strong Allied products and the contribution from its newly closed NDS acquisition, while o...
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.