Advanced Drainage Systems (WMS) AI Stock Analysis

• Market Cap: $10.64B
• Dividend Yield: 0.47%
• Average Volume (3M): 714.48K
• Price to Earnings (P/E): 24.7
• Beta (1Y): 1.39
• Revenue Growth: 0.24%
• EPS Growth: -12.68%
• Country: US
• Employees: 5,705
• Sector: Industrials
• Sector Strength: 83
• Industry: Construction
• EPS (TTM): 1.95
• Shares Outstanding: 77,752,610
• 10 Day Avg. Volume: 964,333
• 30 Day Avg. Volume: 714,482
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 3.55
• Enterprise Value/Gross Profit: 9.86
• Enterprise Value/Ebitda: 12.83
• 1Y Price Target: $161.86
• Price Target Upside: 16.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: $157.00 ▲(12.71% Upside)

Advanced Drainage Systems demonstrates strong financial performance and resilience in profitability, supported by robust cash flow management and operational efficiency. The technical indicators suggest bullish momentum, though caution is advised due to overbought signals. Valuation metrics indicate the stock is fairly valued, with modest income potential. The earnings call provided positive insights into strategic growth and innovation, despite some demand challenges.

Positive Factors

Acquisition

The acquisition of Orenco is expected to leverage complementary portfolio offerings and operational fine-tuning.

Growth

Orenco has an ideal strategic fit alongside Infiltrator and should notably accelerate ADS' growth in the advanced wastewater treatment space.

Market Opportunity

The increasing recurrence of storm events is driving adoption of more resilient stormwater management infrastructure, providing further share opportunity for ADS.

Negative Factors

Agriculture Sales

Agriculture sales were the clear negative to start FY25 with a decrease of 25%.

Cost Pressures

Incremental headwinds are emerging for WMS, including material cost pressures and a more challenged end market backdrop.

Earnings Guidance

The FY'25 guidance cut reflects softness on all fronts: weaker end markets, higher raw material costs, and a market that is not receptive to cost-based price increases.

Advanced Drainage Systems Business Overview & Revenue Model

Company Description

Advanced Drainage Systems (WMS) is a leading manufacturer of innovative water management solutions, specializing in the design and supply of products for stormwater management, sanitary sewer systems, and various drainage applications. The company operates primarily in the construction and infrastructure sectors, providing a comprehensive range of high-performance drainage products, including corrugated plastic pipe, fittings, and related accessories, aimed at improving water quality and sustainability in urban and rural environments.

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 shows strong financial performance with consistent revenue growth and profitability. However, high leverage and a low equity ratio are concerns. The company maintains robust cash flow management, though it could benefit from improved equity balance.

Income Statement

Advanced Drainage Systems has demonstrated consistent revenue growth over the years, with a notable recovery in profitability metrics such as gross profit and net income margins. The gross profit margin for the latest year is impressive at 37.7%, and the company has maintained strong EBIT and EBITDA margins at 22.6% and 22.6%, respectively. Despite a slight decrease in revenue from the previous year, the overall trend is positive.

Balance Sheet

The company's balance sheet shows a relatively high debt-to-equity ratio, which is a point of concern with a ratio of approximately 15.39. Stockholders' equity has significantly decreased, impacting the equity ratio, which stands low at about 2.5%. However, the company maintains a solid asset base with a total asset value of $3.69 billion. Return on Equity has improved, reflecting better profitability relative to equity.

Cash Flow

Advanced Drainage Systems has shown a robust operating cash flow to net income ratio, indicating strong cash generation capability. The free cash flow has decreased compared to the previous year, but the company continues to generate positive free cash flow, reflecting sound financial management. The free cash flow to net income ratio suggests efficient cash utilization in operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.78B	2.90B	2.87B	3.07B	2.77B	1.98B
Gross Profit	1.00B	1.09B	1.15B	1.12B	800.38M	690.08M
EBITDA	769.54M	864.55M	907.39M	868.46M	554.55M	493.51M
Net Income	370.00M	450.17M	509.92M	507.09M	271.33M	224.23M
Balance Sheet
Total Assets	3.60B	3.69B	3.27B	2.90B	2.65B	2.41B
Cash, Cash Equivalents and Short-Term Investments	488.86M	463.32M	490.16M	217.13M	20.13M	195.01M
Total Debt	1.41B	1.45B	1.41B	1.32B	958.84M	841.50M
Total Liabilities	2.04B	2.05B	1.99B	1.91B	1.54B	1.35B
Stockholders Equity	1.55B	1.62B	1.26B	977.37M	1.09B	1.05B
Cash Flow
Free Cash Flow	378.55M	368.55M	534.12M	540.90M	125.81M	373.46M
Operating Cash Flow	588.00M	581.49M	717.93M	707.81M	274.89M	452.22M
Investing Cash Flow	-682.00M	-447.87M	-155.66M	-214.48M	-198.83M	-77.87M
Financing Cash Flow	-105.14M	-157.73M	-284.34M	-296.28M	-251.07M	-354.58M

Advanced Drainage Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 139.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 139.29 is above the 20-day moving average (MA) of 121.68, above the 50-day MA of 118.38, and above the 200-day MA of 119.20, indicating a bullish trend. The MACD of 5.67 indicates Negative momentum. The RSI at 69.04 is Neutral, neither overbought nor oversold. The STOCH value of 93.99 is Negative, 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
LPX	72 Outperform	$6.66B	22.55	17.53%	1.10%	-1.44%	-31.12%
SSD	71 Outperform	$7.96B	24.35	17.88%	0.58%	2.95%	0.76%
IBP	71 Outperform	$7.19B	29.27	37.03%	1.18%	3.44%	0.25%
WMS	71 Outperform	$10.64B	24.69	27.68%	0.47%	0.24%	-12.68%
TREX	68 Neutral	$6.55B	37.92	19.81%	―	-9.65%	-28.30%
Sector *	63 Neutral	$10.80B	16.55	6.58%	2.06%	2.37%	-15.86%

Advanced Drainage Systems Corporate Events

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.

Advanced Drainage Systems Holds Successful Annual Meeting

On July 15, 2025, Darin Harvey, the Executive Vice President of Supply Chain at Advanced Drainage Systems, Inc., announced his resignation effective August 22, 2025, without any disputes or disagreements with the company. During the 2025 Annual Meeting of Stockholders held on July 17, 2025, stockholders elected eleven directors, ratified Deloitte & Touche LLP as the independent accounting firm for fiscal year 2026, and approved the executive officers’ compensation, reflecting continued shareholder support for the company’s governance and financial strategies.

The most recent analyst rating on (WMS) stock is a Buy with a $149.00 price target. To see the full list of analyst forecasts on Advanced Drainage Systems stock, see the WMS Stock Forecast page.

Advanced Drainage Systems Reports Q4 2025 Financial Results

On May 15, 2025, Advanced Drainage Systems announced its financial results for the fourth quarter and fiscal year ending March 31, 2025. The company experienced a decrease in net sales and income in the fourth quarter, attributed to unfavorable weather conditions and economic uncertainties. Despite these challenges, ADS saw growth in its more profitable segments, with a focus on expanding its market share through new products and strategies. The company also declared a cash dividend of $0.18 per share, payable on June 16, 2025, reflecting its commitment to returning value to shareholders.

The most recent analyst rating on (WMS) stock is a Buy with a $200.00 price target. To see the full list of analyst forecasts on Advanced Drainage Systems stock, see the WMS Stock Forecast page.