Advanced Drainage Systems (NYSE:WMS) Releases Quarterly Earnings Results, Beats Estimates By $0.16 EPS

Advanced Drainage Systems (NYSE:WMS) posted its quarterly earnings data on Thursday. The construction company reported $1.27 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.11 by $0.16, FiscalAI reports. The business had revenue of $693.35 million during the quarter, compared to the consensus estimate of $686.37 million. Advanced Drainage Systems had a return on equity of 28.85% and a net margin of 15.35%.Advanced Drainage Systems’s quarterly revenue was up .4% on a year-over-year basis. During the same period last year, the company earned $1.09 earnings per share.

Here are the key takeaways from Advanced Drainage Systems’ conference call:

• ADS reported one of its most profitable Q3s with a 30.2% adjusted EBITDA margin and a 9% increase in adjusted EBITDA despite flat revenue, driven by allied products, Infiltrator, HP Pipe gains and cost‑improvement programs.
• The company closed the NDS acquisition (included as ~$40M revenue in Q4 at ~20% EBITDA margin) and expects roughly $25M of annual cost synergies by year three, with integration work and synergy details to be discussed at Investor Day.
• Management raised fiscal 2026 guidance to a revenue midpoint of $3.015B and an adjusted EBITDA midpoint of $945M (31.1–31.6% margin), noting the update already factors in NDS and recent storm impacts.
• Strong cash generation (YTD operating cash of $779M), a cash balance above $1B, pro forma leverage of ~1.5x after NDS, and a new $1B repurchase authorization (totaling $1.148B) support capital flexibility while prioritizing organic investment.
• Management trimmed its non‑residential in‑market demand outlook to down low‑to‑mid single digits, highlighted ongoing residential weakness (especially DIY), and warned that Q4 results are highly variable and could be choppier due to severe winter storms.

Advanced Drainage Systems Trading Up 8.0%

Shares of Advanced Drainage Systems stock traded up $12.84 on Thursday, hitting $173.10. 836,759 shares of the company’s stock traded hands, compared to its average volume of 706,164. The company has a debt-to-equity ratio of 0.75, a current ratio of 3.48 and a quick ratio of 2.60. Advanced Drainage Systems has a one year low of $93.92 and a one year high of $173.75. The company has a fifty day moving average of $151.81 and a two-hundred day moving average of $143.12. The company has a market capitalization of $13.46 billion, a price-to-earnings ratio of 29.54, a price-to-earnings-growth ratio of 2.03 and a beta of 1.34.

Insider Transactions at Advanced Drainage Systems

In related news, insider Tim A. Makowski sold 4,901 shares of Advanced Drainage Systems stock in a transaction on Wednesday, November 12th. The shares were sold at an average price of $149.21, for a total value of $731,278.21. Following the completion of the sale, the insider owned 2,467 shares of the company’s stock, valued at approximately $368,101.07. This trade represents a 66.52% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider D. Scott Barbour sold 80,030 shares of the business’s stock in a transaction dated Wednesday, November 12th. The stock was sold at an average price of $148.95, for a total transaction of $11,920,468.50. Following the sale, the insider directly owned 42,867 shares of the company’s stock, valued at approximately $6,385,039.65. The trade was a 65.12% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 97,772 shares of company stock valued at $14,605,539 in the last 90 days. Corporate insiders own 1.63% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the business. Northwestern Mutual Wealth Management Co. increased its holdings in Advanced Drainage Systems by 352.0% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 226 shares of the construction company’s stock worth $26,000 after acquiring an additional 176 shares during the last quarter. Caitong International Asset Management Co. Ltd purchased a new stake in shares of Advanced Drainage Systems in the 3rd quarter valued at about $36,000. Danske Bank A S bought a new stake in Advanced Drainage Systems during the third quarter valued at approximately $55,000. Headlands Technologies LLC purchased a new position in Advanced Drainage Systems in the second quarter worth $112,000. Finally, Parallel Advisors LLC boosted its holdings in shares of Advanced Drainage Systems by 185.8% in the 3rd quarter. Parallel Advisors LLC now owns 1,229 shares of the construction company’s stock worth $170,000 after purchasing an additional 799 shares in the last quarter. Hedge funds and other institutional investors own 89.83% of the company’s stock.

Wall Street Analysts Forecast Growth

A number of analysts have recently issued reports on the stock. UBS Group lifted their price objective on shares of Advanced Drainage Systems from $183.00 to $197.00 and gave the company a “buy” rating in a report on Tuesday, January 6th. KeyCorp upped their price target on shares of Advanced Drainage Systems from $170.00 to $180.00 and gave the stock an “overweight” rating in a research report on Monday, January 26th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Advanced Drainage Systems in a research report on Wednesday, January 21st. Oppenheimer upped their price target on shares of Advanced Drainage Systems from $175.00 to $180.00 and gave the company an “outperform” rating in a research note on Thursday, January 15th. Finally, Barclays increased their price objective on Advanced Drainage Systems from $181.00 to $187.00 and gave the stock an “overweight” rating in a research report on Thursday, January 15th. Eight equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $165.33.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc (NYSE: WMS) is a leading manufacturer and supplier of water management solutions in North America. Headquartered in Hilliard, Ohio, the company specializes in the design, production and distribution of high-density polyethylene (HDPE) drainage pipe and related products. Its core business addresses stormwater management, on-site septic systems and erosion control for residential, commercial and infrastructure projects.

The company’s product portfolio includes corrugated plastic pipe, tubing, fittings, geocells, geogrids and stormwater structures such as inlets, manholes and detention/retention systems.