Advanced Drainage Systems (WMS)
NYSE:WMS
Top Page
Advanced Drainage Systems
(NYSE:WMS)
Select Model
Select Model
Rating:76Outperform
Price Target:
$158.00
▲(7.18% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by strong financial performance (profitability and cash generation) and favorable technical trend signals. Raised guidance and positive operating commentary support the outlook, while the main constraints are a higher valuation (P/E ~28) and balance-sheet risk/ongoing financing activity.
Positive Factors
Cash generation & FCF
ADS converts strong operating profits into cash: TTM OCF and FCF levels provide durable funding for capex, acquisitions, buybacks and debt paydown. Consistent multi-hundred-million cash flows reduce execution risk and support strategic moves without relying solely on markets.
Negative Factors
Elevated leverage & financing activity
A meaningful debt load and ongoing liability management require active refinancing and market access. While maturities are being extended, sustained leverage increases sensitivity to interest rates and limits flexibility for large opportunistic investments if cash flow dips or market conditions tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & FCF
ADS converts strong operating profits into cash: TTM OCF and FCF levels provide durable funding for capex, acquisitions, buybacks and debt paydown. Consistent multi-hundred-million cash flows reduce execution risk and support strategic moves without relying solely on markets.
Read all positive factors
Advanced Drainage Systems (WMS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.48B
Dividend Yield0.47%
Average Volume (3M)873.38K
Price to Earnings (P/E)30.1
Beta (1Y)1.23
Revenue Growth2.48%
EPS Growth-6.92%
CountryUS
Employees5,705
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)1.27
Shares Outstanding77,895,584
10 Day Avg. Volume752,971
30 Day Avg. Volume873,376
Financial Highlights & Ratios
PEG Ratio-1.72
Price to Book (P/B)5.21
Price to Sales (P/S)2.90
P/FCF Ratio22.86
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue3.99
Enterprise Value/Gross Profit10.43
Enterprise Value/Ebitda13.32
Forecast
1Y Price Target
$196.67Price Target Upside33.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)6.79
Revenue Forecast (FY)$3.42B
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 St...
How the Company Makes Money
Advanced Drainage Systems makes money primarily by manufacturing and selling water management products—most notably thermoplastic (primarily HDPE) corrugated pipe systems—through distributors, contractors, and other channel partners serving constr...
Advanced Drainage Systems Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Positive
The call emphasized strong profitability, cash generation, and strategic progress (notably the NDS acquisition, margin expansion, and robust cash flow), while acknowledging near-term demand softness in residential and certain pipe subsegments, Q4 weather variability, and integration/maturity-related financing considerations. The positive operational improvements, guidance raise, and balance sheet flexibility outweigh the headwinds discussed.Positive Updates
Strong Profitability and Margin Expansion
Adjusted EBITDA increased 9% year over year and adjusted EBITDA margin expanded 250 basis points to 30.2% in the quarter, representing one of the most profitable third quarters in company history.
Negative Updates
Residential End Market Weakness
Residential sales were down slightly and management noted the residential end market was down high single digits; DIY channel continues to experience significant weakness, impacting single-wall pipe and retail-facing products.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Profitability and Margin Expansion
Adjusted EBITDA increased 9% year over year and adjusted EBITDA margin expanded 250 basis points to 30.2% in the quarter, representing one of the most profitable third quarters in company history.
Read all positive updates
Company Guidance
The company raised its fiscal 2026 guidance to a revenue midpoint of $3.015 billion and an adjusted EBITDA midpoint of $945 million, with an expected adjusted EBITDA margin of 31.1–31.6% (up 50–100 bps year‑over‑year); the guide assumes ~ $40 million of NDS revenue at an approximate 20% EBITDA margin and incorporates expected fourth‑quarter weather impacts (e.g., Winter Storm Fern) that increase quarter‑to‑quarter variability. Year‑to‑date cash from operations was $779 million (converting >100% of adjusted EBITDA), cash flow from operations rose $239 million (44% YoY), the company finished the period with >$1 billion in cash and ~0.5x net leverage, pro‑forma leverage post‑NDS is ~1.5x (within 1–2x target), CapEx guidance was modestly increased (≈$40 million at the midpoint due to timing), management plans to access the capital markets for near‑term maturities, authorized a new $1.0 billion share repurchase (total authorization $1.148 billion), and expects $25 million of run‑rate cost synergies from NDS by year three.Advanced Drainage Systems Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
71
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.99B | 2.90B | 2.87B | 3.07B | 2.77B | 1.98B |
| Gross Profit | 1.14B | 1.09B | 1.15B | 1.12B | 800.38M | 690.08M |
| EBITDA | 895.13M | 864.55M | 910.52M | 872.43M | 558.87M | 493.51M |
| Net Income | 470.72M | 450.17M | 509.92M | 507.09M | 271.33M | 224.23M |
Balance Sheet | ||||||
| Total Assets | 4.14B | 3.69B | 3.27B | 2.90B | 2.65B | 2.41B |
| Cash, Cash Equivalents and Short-Term Investments | 1.01B | 463.32M | 490.16M | 217.13M | 20.13M | 195.01M |
| Total Debt | 1.45B | 1.45B | 1.37B | 1.34B | 958.84M | 850.50M |
| Total Liabilities | 2.12B | 2.05B | 1.99B | 1.91B | 1.54B | 1.35B |
| Stockholders Equity | 2.01B | 1.62B | 1.26B | 977.37M | 1.09B | 1.05B |
Cash Flow | ||||||
| Free Cash Flow | 577.09M | 368.55M | 534.12M | 540.90M | 125.81M | 373.46M |
| Operating Cash Flow | 820.36M | 581.49M | 717.93M | 707.81M | 274.89M | 452.22M |
| Investing Cash Flow | -231.55M | -447.87M | -155.66M | -214.48M | -198.83M | -77.87M |
| Financing Cash Flow | -74.43M | -157.73M | -284.34M | -296.28M | -251.07M | -354.58M |
Advanced Drainage Systems Technical Analysis
Positive
147.42
Price Trends
153.30
Negative
151.66
Negative
142.30
Positive
Market Momentum
-3.39
Negative
55.44
Neutral
87.74
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 147.42 is above the 20-day moving average (MA) of 137.90, below the 50-day MA of 153.30, and above the 200-day MA of 142.30, indicating a neutral trend. The MACD of -3.39 indicates Negative momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 87.74 is Negative, 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 2 New Risks
1.
Our results after our acquisition of NDS may suffer if we do not effectively manage our expanded operations following the acquisition or the business of NDS may underperform relative to our expectations. Q4, 2025
2.
Uncertainties associated with our acquisition of NDS may cause a loss of management personnel and other key employees, which could adversely affect our future business, operations and financial results. Q4, 2025
Advanced Drainage Systems Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $11.48B | 30.06 | 25.82% | 0.47% | 2.48% | -6.92% | |
64 Neutral | $9.08B | -17.89 | -11.39% | 2.43% | 3.47% | -148.53% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $12.67B | 16.37 | -537.31% | 1.94% | -3.62% | 3.41% | |
52 Neutral | $4.83B | 20.84 | 12.70% | 1.91% | -3.78% | -24.77% | |
45 Neutral | $9.19B | 90.31 | 10.11% | ― | -6.44% | -48.84% |
* Industrials Sector Average
WMS
Advanced Drainage Systems
147.42
39.24
36.28%
BLDR
Builders Firstsource
83.09
-41.64
-33.38%
FBIN
Fortune Brands Innovations
40.30
-12.58
-23.79%
MAS
Masco
62.23
-0.36
-0.57%
OC
Owens Corning
112.91
-24.98
-18.12%
Advanced Drainage Systems Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Advanced Drainage Systems Announces Major Refinancing and Liquidity Boost
Positive
Feb 27, 2026
On February 27, 2026, Advanced Drainage Systems issued $500 million of 5.375% senior notes due 2034, guaranteed by key domestic subsidiaries and sold to institutional and offshore investors, with proceeds earmarked to refinance its senior secured ...
Business Operations and StrategyPrivate Placements and Financing
Advanced Drainage Systems Announces New Notes Offering, Refinancing
Positive
Feb 12, 2026
On February 12, 2026, Advanced Drainage Systems announced it had priced a $500 million private offering of 5.375% senior unsecured notes due 2034, guaranteed by certain domestic subsidiaries, with closing expected on February 27, 2026, subject to ...
Business Operations and StrategyPrivate Placements and Financing
Advanced Drainage Systems Announces Major Debt Refinancing Plan
Positive
Feb 12, 2026
On February 12, 2026, Advanced Drainage Systems announced plans to launch a private offering of up to $500 million in senior unsecured notes due 2034, with the notes guaranteed by its domestic subsidiaries that back its senior secured credit facil...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Advanced Drainage Systems Boosts Buybacks After Strong Quarter
Positive
Feb 5, 2026
On February 5, 2026, Advanced Drainage Systems reported fiscal third-quarter 2026 results for the period ended December 31, 2025, highlighting modest net sales growth of 0.4% to $693.4 million but significantly higher profitability, with net incom...
Business Operations and StrategyM&A Transactions
Advanced Drainage Systems Completes Acquisition of NDS Business
Positive
Feb 2, 2026
On February 2, 2026, Advanced Drainage Systems completed its previously announced all-cash acquisition of National Diversified Sales, the water management business of Germany’s NORMA Group SE, for approximately $1.0 billion, subject to custo...
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.