Advanced Drainage Systems (NYSE:WMS) Issues Earnings Results, Beats Expectations By $0.07 EPS

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

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 Price Performance

NYSE WMS traded up $1.48 during trading hours on Friday, hitting $124.11. 1,152,282 shares of the company’s stock traded hands, compared to its average volume of 729,573. Advanced Drainage Systems has a 52-week low of $119.53 and a 52-week high of $179.32. The company has a debt-to-equity ratio of 0.95, a current ratio of 2.12 and a quick ratio of 1.18. The firm’s 50-day moving average is $130.03 and its 200-day moving average 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 Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be paid a $0.20 dividend. The ex-dividend date is Tuesday, December 1st. This represents a $0.80 dividend on an annualized basis and a dividend yield of 0.6%. Advanced Drainage Systems’s dividend payout ratio is presently 13.82%.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on WMS. Barclays dropped their price objective on Advanced Drainage Systems from $191.00 to $183.00 and set an “overweight” rating for the company in a research note on Friday. UBS Group upped their price objective on Advanced Drainage Systems from $205.00 to $207.00 and gave the company a “buy” rating in a report on Friday, August 7th. Stephens reissued an “overweight” rating and set a $175.00 price objective on shares of Advanced Drainage Systems in a research report on Monday, September 21st. National Bank Financial set a $190.00 price objective on shares of Advanced Drainage Systems in a report on Monday, August 24th. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Advanced Drainage Systems in a research note on Thursday, October 15th. Eight investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, Advanced Drainage Systems has an average rating of “Moderate Buy” and an average price target of $184.40.

Key Stories Impacting Advanced Drainage Systems

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

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.