Advanced Drainage Systems (WMS) AI Stock Analysis

• Market Cap: $8.90B
• Dividend Yield: 0.56%
• Average Volume (3M): 747.60K
• Price to Earnings (P/E): 19.9
• Beta (1Y): 1.27
• Revenue Growth: 1.04%
• EPS Growth: -10.78%
• Country: US
• Employees: 5,705
• Sector: Industrials
• Sector Strength: 94
• Industry: Construction
• EPS (TTM): 1.03
• Shares Outstanding: 77,640,720
• 10 Day Avg. Volume: 609,902
• 30 Day Avg. Volume: 747,598
• PEG Ratio: -5.40
• Price to Book (P/B): 95.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.07
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 8.93
• Enterprise Value/Ebitda: 2.96
• 1Y Price Target: $142.50
• Price Target Upside: 21.23% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: $129.00 ▲(9.74%Upside)

Advanced Drainage Systems demonstrates strong financial performance and strategic growth, supported by solid earnings. However, high leverage and technical resistance highlight risks. Economic uncertainties and pressure in certain markets also weigh on the outlook.

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, 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 makes money primarily through the sale of its water management products, which include a diverse array of pipes, chambers, and related drainage solutions. The company's revenue model is heavily reliant on its manufacturing and distribution capabilities, which are supported by an extensive network of facilities and distributors. Key revenue streams include sales to government entities for infrastructure projects, agricultural sector sales for land drainage, and commercial and residential construction projects. Additionally, strategic partnerships with distributors and contractors enhance their market reach and contribute significantly to their earnings. The company also invests in research and development to innovate and maintain a competitive edge in sustainable water management solutions.

Advanced Drainage Systems Financial Statement Overview

Summary

Advanced Drainage Systems shows strong financial performance overall with consistent revenue growth and profitability. However, the high debt-to-equity ratio and decreased stockholder equity are concerns. Despite these, the company maintains a robust cash flow and asset base, indicating sound financial health but with room for improving leverage.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.90B	2.87B	3.07B	2.77B	1.98B
Gross Profit	1.09B	1.15B	1.12B	800.38M	690.08M
EBITDA	657.44M	907.39M	868.46M	554.55M	493.51M
Net Income	450.17M	509.92M	507.09M	271.33M	224.23M
Balance Sheet
Total Assets	3.69B	3.27B	2.90B	2.65B	2.41B
Cash, Cash Equivalents and Short-Term Investments	463.32M	490.16M	217.13M	20.13M	195.01M
Total Debt	1.43B	1.41B	1.32B	958.84M	841.50M
Total Liabilities	2.05B	1.99B	1.91B	1.54B	1.35B
Stockholders Equity	92.65M	1.26B	977.37M	1.09B	1.05B
Cash Flow
Free Cash Flow	368.55M	534.12M	540.90M	125.81M	373.46M
Operating Cash Flow	581.49M	717.93M	707.81M	274.89M	452.22M
Investing Cash Flow	-447.87M	-155.66M	-214.48M	-198.83M	-77.87M
Financing Cash Flow	-157.73M	-284.34M	-296.28M	-251.07M	-354.58M

Advanced Drainage Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 117.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 117.55 is above the 20-day moving average (MA) of 116.25, above the 50-day MA of 115.48, and below the 200-day MA of 121.57, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 53.99 is Neutral, neither overbought nor oversold. The STOCH value of 37.21 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
AZEK	79 Outperform	$7.82B	52.67	10.62%	―	5.93%	3.50%
SSD	78 Outperform	$6.87B	21.37	18.10%	0.69%	1.38%	-3.80%
IBP	73 Outperform	$5.74B	23.70	36.73%	1.51%	4.30%	-0.69%
Sector *	71 Outperform	¥263.98B	13.78	8.47%	2.91%	6.34%	13.00%
WMS	70 Outperform	$8.90B	19.92	31.26%	0.56%	1.04%	-10.78%
TREX	69 Neutral	$7.10B	36.24	23.07%	―	-9.10%	-21.50%
LPX	67 Neutral	$6.20B	15.67	24.41%	1.50%	8.09%	55.08%

Advanced Drainage Systems Corporate Events

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.