Advanced Drainage Systems (NYSE:WMS – Get Free Report) posted its earnings results on Thursday. The construction company reported $1.88 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.81 by $0.07, FiscalAI reports. The business had revenue of $889.41 million during the quarter, compared to analyst estimates of $921.79 million. Advanced Drainage Systems had a return on equity of 28.28% and a net margin of 14.00%. The company’s revenue for the quarter was up 4.6% compared to the same quarter last year. During the same quarter last year, the firm earned $1.97 earnings per share.
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 Up 1.2%
Shares of NYSE:WMS traded up $1.48 during trading on Friday, hitting $124.11. The company’s stock had a trading volume of 1,152,282 shares, compared to its average volume of 729,573. The company has a debt-to-equity ratio of 0.95, a quick ratio of 1.18 and a current ratio of 2.12. Advanced Drainage Systems has a fifty-two week low of $119.53 and a fifty-two week high of $179.32. The stock’s 50-day moving average price is $130.03 and its two-hundred day moving average price is $143.09. The company has a market capitalization of $9.36 billion, a PE ratio of 23.60, a PEG ratio of 1.60 and a beta of 1.30.
Advanced Drainage Systems Announces Dividend
The firm also recently announced a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be given a dividend of $0.20 per share. This represents a $0.80 dividend on an annualized basis and a dividend yield of 0.6%. The ex-dividend date of this dividend is Tuesday, December 1st. Advanced Drainage Systems’s payout ratio is presently 13.82%.
Advanced Drainage Systems News Roundup
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
Analyst Upgrades and Downgrades
WMS has been the subject of a number of analyst reports. DA Davidson decreased their price target on Advanced Drainage Systems from $190.00 to $180.00 and set a “buy” rating for the company in a report on Friday. UBS Group increased their price objective on shares of Advanced Drainage Systems from $205.00 to $207.00 and gave the company a “buy” rating in a research report on Friday, August 7th. Zacks Research upgraded shares of Advanced Drainage Systems from a “strong sell” rating to a “hold” rating in a research note on Monday, July 27th. 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. Finally, Robert W. Baird set a $206.00 target price on shares of Advanced Drainage Systems in a research report on Friday, August 7th. Eight research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $184.40.
Read Our Latest Analysis on WMS
Advanced Drainage Systems Company Profile
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.
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