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

Advanced Drainage Systems (NYSE:WMS) posted its quarterly earnings results on Thursday. The construction company reported $1.88 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 analysts’ expectations 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 was up 4.6% on a year-over-year basis. During the same quarter in the previous year, the firm 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 Up 1.2%

Shares of WMS traded up $1.48 during mid-day trading on Friday, hitting $124.11. 1,152,282 shares of the company’s stock were exchanged, 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. The company has a market cap of $9.36 billion, a price-to-earnings ratio of 23.60, a P/E/G ratio of 1.60 and a beta of 1.30. The stock’s 50-day moving average is $130.03 and its 200-day moving average is $143.09. Advanced Drainage Systems has a fifty-two week low of $119.53 and a fifty-two week high of $179.32.

Advanced Drainage Systems Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be issued a $0.20 dividend. The ex-dividend date of this dividend 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 currently 13.82%.

Analysts Set New Price Targets

Several equities analysts have weighed in on WMS shares. Oppenheimer reissued an “outperform” rating and set a $180.00 price objective (down from $185.00) on shares of Advanced Drainage Systems in a report on Friday. Robert W. Baird set a $206.00 target price on Advanced Drainage Systems in a report on Friday, August 7th. Royal Bank Of Canada lowered their price target on Advanced Drainage Systems from $170.00 to $163.00 and set an “outperform” rating on the stock in a report on Friday. DA Davidson lowered their target price on Advanced Drainage Systems from $190.00 to $180.00 and set a “buy” rating on the stock in a research report on Friday. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Advanced Drainage Systems in a report on Thursday, October 15th. Eight equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, Advanced Drainage Systems presently has a consensus rating of “Moderate Buy” and an average target price of $184.40.

Key Advanced Drainage Systems News

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.