Advanced Drainage Systems (WMS) AI Stock Analysis

• Market Cap: $11.81B
• Dividend Yield: 0.47%
• Average Volume (3M): 683.76K
• Price to Earnings (P/E): 25.9
• Beta (1Y): 1.28
• 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: 77,764,490
• 10 Day Avg. Volume: 515,445
• 30 Day Avg. Volume: 683,762
• 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: 0.98
• Enterprise Value/Revenue: 3.88
• Enterprise Value/Gross Profit: 10.17
• Enterprise Value/Ebitda: 13.20
• 1Y Price Target: $173.00
• Price Target Upside: 15.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 5.95
• Revenue Forecast (FY): $2.99B

• Rating: 74 Outperform
• Price Target: $166.00 ▲(10.91% Upside)

Advanced Drainage Systems shows strong financial performance and positive earnings call results, with robust revenue and EBITDA growth. The technical indicators suggest a positive trend, although the valuation is moderate with a low dividend yield. The company's strategic initiatives and acquisitions are expected to support long-term growth, but attention to residential market challenges and potential demand risks is necessary.

Positive Factors

Revenue Growth

Consistent revenue and EBITDA growth indicate strong market demand and effective business strategies, supporting long-term financial health.

Acquisition Strategy

Strategic acquisitions like NDS expand product lines and market reach, providing a competitive edge and potential for revenue synergies.

Cash Flow Management

Strong cash flow growth enhances financial flexibility, enabling reinvestment in growth initiatives and debt reduction, supporting long-term stability.

Negative Factors

Residential Market Challenges

Challenges in the residential market due to interest rates may limit growth in this segment, impacting overall revenue potential.

Potential Demand Risks

Demand risks from macroeconomic factors could affect sales stability, necessitating cautious inventory and financial management.

Increased SG&A Costs

Rising SG&A costs may pressure margins, requiring efficient cost management to maintain profitability amidst expansion efforts.

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 primarily through the sale of its extensive range of drainage products, which are utilized in infrastructure, agriculture, and residential construction projects. The company benefits from a diversified revenue model that includes direct sales to contractors, distributors, and retail outlets. Key revenue streams include the sales of polyvinyl chloride (PVC) pipes, corrugated polyethylene pipes, and other complementary products. Additionally, Advanced Drainage Systems engages in strategic partnerships with construction firms and municipalities, allowing for bulk sales and long-term contracts that enhance its revenue stability. The company also capitalizes on trends in sustainable construction and environmental regulations promoting efficient water management, further contributing to its earnings.

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	2.99B	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	877.71M	864.55M	910.52M	872.43M	558.87M	493.51M
Net Income	458.33M	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	1.91B	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: 149.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 149.67 is above the 20-day moving average (MA) of 148.13, above the 50-day MA of 144.06, and above the 200-day MA of 126.05, indicating a bullish trend. The MACD of 1.65 indicates Positive momentum. The RSI at 53.95 is Neutral, neither overbought nor oversold. The STOCH value of 56.74 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	$11.81B	25.90	27.09%	0.47%	2.48%	-6.92%
FBIN	66 Neutral	$6.15B	19.13	13.72%	1.91%	-3.78%	-24.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BLDR	63 Neutral	$12.15B	20.64	13.56%	―	-6.44%	-48.84%
MAS	53 Neutral	$13.13B	16.19	―	1.94%	-3.62%	3.41%
OC	52 Neutral	$9.57B	―	-3.27%	2.43%	3.47%	-148.53%

Advanced Drainage Systems Corporate Events

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.

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.