Advanced Drainage Systems (WMS) AI Stock Analysis

• Market Cap: $10.93B
• Dividend Yield: 0.48%
• Average Volume (3M): 744.54K
• Price to Earnings (P/E): 25.4
• Beta (1Y): 1.36
• Revenue Growth: 0.24%
• EPS Growth: -12.68%
• Country: US
• Employees: 5,705
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 1.95
• Shares Outstanding: 77,752,610
• 10 Day Avg. Volume: 602,505
• 30 Day Avg. Volume: 744,536
• 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: 0.90
• Enterprise Value/Revenue: 3.55
• Enterprise Value/Gross Profit: 9.86
• Enterprise Value/Ebitda: 12.83
• 1Y Price Target: $161.13
• Price Target Upside: 14.35% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 75 Outperform
• Price Target: $159.00 ▲(12.84% Upside)

Advanced Drainage Systems demonstrates strong financial performance and technical momentum, supported by efficient operations and strategic initiatives. While the valuation is relatively high, the company's robust cash flow and profitability metrics, along with positive earnings call insights, contribute to a solid overall stock score.

Positive Factors

Strong Cash Flow Management

The company's ability to generate significant free cash flow highlights its effective working capital management and financial strength, providing a solid foundation for future investments and growth.

Product Innovation

New product launches in water quality enhance the company's competitive edge and market position, supporting long-term growth in the sustainable infrastructure sector.

Operational Efficiency

Improved operational efficiency reduces costs and enhances profitability, enabling the company to maintain competitive pricing and invest in strategic initiatives.

Negative Factors

Revenue Decline

A decline in revenue indicates potential challenges in maintaining growth momentum, which could impact future profitability and market share if not addressed.

Tepid Demand Environment

A sluggish demand environment poses risks to revenue growth and market expansion, potentially affecting the company's ability to capitalize on its strategic initiatives.

Infrastructure Revenue Decline

A decline in infrastructure revenue suggests challenges in capturing project activity, which could hinder the company's growth in a key market segment.

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 exhibits strong profitability and cash flow management, despite a recent dip in revenue. The company maintains a balanced leverage position and continues to generate solid returns on equity. While the revenue decline poses a challenge, the company's operational efficiency and cash flow strength provide a solid foundation for future growth.

Income Statement

Advanced Drainage Systems shows a solid performance with a Gross Profit Margin of 36% and a Net Profit Margin of 13.3% in the TTM period. However, the company experienced a revenue decline of 4.3% in the TTM, indicating potential challenges in maintaining growth. The EBIT and EBITDA margins remain strong at 20.9% and 27.7%, respectively, showcasing operational efficiency.

Balance Sheet

The company's Debt-to-Equity Ratio is 0.91, indicating a balanced approach to leveraging. Return on Equity is robust at 23.9%, reflecting effective use of equity to generate profits. The Equity Ratio stands at 42.9%, suggesting a stable financial structure with a reasonable level of equity financing.

Cash Flow

The Free Cash Flow Growth Rate is positive at 2.7% in the TTM, indicating healthy cash generation. The Operating Cash Flow to Net Income Ratio is 1.52, and the Free Cash Flow to Net Income Ratio is 0.64, both demonstrating strong cash flow management and the ability to convert earnings into cash effectively.

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	3.91B	3.69B	3.27B	2.90B	2.65B	2.41B
Cash, Cash Equivalents and Short-Term Investments	638.27M	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	2.13B	2.05B	1.99B	1.91B	1.54B	1.35B
Stockholders Equity	1.76B	1.62B	1.26B	977.37M	1.09B	1.05B
Cash Flow
Free Cash Flow	465.21M	368.55M	534.12M	540.90M	125.81M	373.46M
Operating Cash Flow	673.04M	581.49M	717.93M	707.81M	274.89M	452.22M
Investing Cash Flow	-460.58M	-447.87M	-155.66M	-214.48M	-198.83M	-77.87M
Financing Cash Flow	-114.96M	-157.73M	-284.34M	-296.28M	-251.07M	-354.58M

Advanced Drainage Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 140.91
• 50DMA: Negative
• 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 140.91 is above the 20-day moving average (MA) of 139.66, below the 50-day MA of 141.19, and above the 200-day MA of 121.13, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.10 is Neutral, neither overbought nor oversold. The STOCH value of 74.19 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	75 Outperform	$10.93B	25.37	27.68%	0.48%	0.24%	-12.68%
FBIN	69 Neutral	$5.96B	15.60	16.84%	2.00%	-5.79%	-9.90%
OC	69 Neutral	$10.56B	33.30	12.26%	2.10%	13.08%	-67.65%
MAS	64 Neutral	$14.24B	18.07	-118.61%	1.79%	-2.73%	-8.31%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BLDR	59 Neutral	$13.59B	18.60	17.83%	―	-6.39%	-42.36%

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.

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.