Advanced Drainage Systems (NYSE:WMS) Announces Earnings Results

Advanced Drainage Systems (NYSE:WMS) announced its quarterly earnings results on Thursday. The construction company reported $1.88 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.81 by $0.07, FiscalAI reports. The company had revenue of $889.41 million during the quarter, compared to the consensus estimate of $921.79 million. Advanced Drainage Systems had a return on equity of 28.28% and a net margin of 14.00%. Advanced Drainage Systems’s revenue for the quarter was up 4.6% on a year-over-year basis. During the same period in the previous year, the business earned $1.97 EPS.

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

• First-half revenue rose 13% year over year, including 2% organic growth, and adjusted EBITDA margin reached a company-record 34.1%. Management said pricing more than offset material and transportation cost inflation.
• ADS lowered fiscal 2027 revenue guidance by 3% at the midpoint to $3.35 billion and adjusted EBITDA guidance by 1% to $1.015 billion, citing lower-than-expected raw-material inflation. Residential land-development demand has weakened, though the company still expects low-single-digit organic growth in the second half.
• End-market conditions remain uneven: organic residential sales fell 4% year to date, while non-residential revenue grew 8% organically, led by data centers, warehouses, and commercial construction. Management described speculative construction and some local infrastructure activity as choppy.
• NDS is performing ahead of its first-year synergy plan, with additional cost opportunities identified; cross-selling has begun, but management said its larger impact is likely next fiscal year.
• ADS agreed to acquire stormwater-solutions provider StormTrap for approximately $530 million, a deal management expects to be accretive to adjusted EPS in the first quarter after closing. The company cited cross-selling potential and expects leverage to remain within its preferred range after the transaction.

Advanced Drainage Systems Stock Performance

NYSE:WMS traded up $1.48 during mid-day trading on Friday, reaching $124.11. 1,152,282 shares of the stock were exchanged, compared to its average volume of 729,573. The stock has a market capitalization of $9.36 billion, a P/E ratio of 23.60, a P/E/G ratio of 1.60 and a beta of 1.30. Advanced Drainage Systems has a 1 year low of $119.53 and a 1 year high of $179.32. The company has a 50 day simple moving average of $130.03 and a 200-day simple moving average of $143.09. The company has a quick ratio of 1.18, a current ratio of 2.12 and a debt-to-equity ratio of 0.95.

Advanced Drainage Systems Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be paid a dividend of $0.20 per share. This represents a $0.80 dividend on an annualized basis and a yield of 0.6%. The ex-dividend date is Tuesday, December 1st. Advanced Drainage Systems’s dividend payout ratio (DPR) is currently 13.82%.

Advanced Drainage Systems News Summary

Here are the key news stories impacting Advanced Drainage Systems this week:

• Positive Sentiment: ADS declared a quarterly dividend of $0.20 per share, payable December 15, with a December 1 ex-dividend date. The annualized payout is $0.80 per share, a 0.6% yield.
• Neutral Sentiment: Royal Bank of Canada, Oppenheimer and Barclays lowered their price targets to $163, $180 and $183, respectively, but maintained “outperform” or “overweight” ratings. The revised targets still imply substantial upside from the cited $124.11 share price. Royal Bank of Canada rating information Oppenheimer rating information Barclays rating information
• Negative Sentiment: Fiscal Q2 2027 revenue of $889.4 million fell short of the roughly $921.8 million estimate. EPS was $1.88—above one consensus estimate of $1.81, but below Zacks’ $1.89 estimate—and down from $1.97 a year earlier. Reports also cited a cut to guidance, contributing to the sharp post-results decline in shares. Second-quarter results announcement Earnings coverage

Analysts Set New Price Targets

Several brokerages have recently weighed in on WMS. Oppenheimer reissued an “outperform” rating and set a $180.00 target price (down from $185.00) on shares of Advanced Drainage Systems in a research report on Friday. UBS Group upped their price target on Advanced Drainage Systems from $205.00 to $207.00 and gave the company a “buy” rating in a report on Friday, August 7th. Robert W. Baird set a $206.00 price target on shares of Advanced Drainage Systems in a research note on Friday, August 7th. Stephens reiterated an “overweight” rating and issued a $175.00 price target on shares of Advanced Drainage Systems in a research note on Monday, September 21st. Finally, Royal Bank Of Canada cut their price objective on shares of Advanced Drainage Systems from $170.00 to $163.00 and set an “outperform” rating on the stock in a report on Friday. Eight analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat.com, Advanced Drainage Systems has an average rating of “Moderate Buy” and a consensus price target of $184.40.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc (NYSE: WMS) is a manufacturer of water management products and solutions. The company produces thermoplastic corrugated pipe, fittings, drainage structures, stormwater chambers and related products used to manage the collection, conveyance, storage and treatment of water.

Its products serve a range of markets, including residential, commercial, agricultural, infrastructure and environmental applications. Advanced Drainage Systems supplies solutions for stormwater management, septic and wastewater systems, highway and road construction, land development, agriculture and erosion control.

Founded in 1966 and headquartered in Hilliard, Ohio, the company serves customers through a manufacturing and distribution network primarily covering the United States and Canada, with additional international operations.