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

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

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 NYSE WMS traded up $12.84 during midday trading on Thursday, hitting $173.10. The stock had a trading volume of 836,759 shares, compared to its average volume of 706,164. The firm has a market cap of $13.46 billion, a P/E ratio of 29.54, a price-to-earnings-growth ratio of 2.03 and a beta of 1.34. Advanced Drainage Systems has a fifty-two week low of $93.92 and a fifty-two week high of $173.75. The company has a debt-to-equity ratio of 0.75, a current ratio of 3.48 and a quick ratio of 2.60. The company’s 50-day simple moving average is $151.81 and its 200 day simple moving average is $143.12.

Insider Transactions at Advanced Drainage Systems

In other Advanced Drainage Systems news, Director Robert M. Eversole sold 10,569 shares of the business’s stock in a transaction dated Wednesday, December 3rd. The stock was sold at an average price of $152.82, for a total transaction of $1,615,154.58. Following the completion of the sale, the director directly owned 50,076 shares of the company’s stock, valued at approximately $7,652,614.32. The trade was a 17.43% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider Tim A. Makowski sold 4,901 shares of the firm’s stock in a transaction dated Wednesday, November 12th. The shares were sold at an average price of $149.21, for a total transaction of $731,278.21. Following the completion of the transaction, the insider directly owned 2,467 shares in the company, valued at $368,101.07. This trade represents a 66.52% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 97,772 shares of company stock valued at $14,605,539. 1.63% of the stock is owned by company insiders.

Hedge Funds Weigh In On Advanced Drainage Systems

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Northwestern Mutual Wealth Management Co. increased its stake in shares of 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 valued at $26,000 after acquiring an additional 176 shares during the last quarter. Baird Financial Group Inc. increased its holdings in shares of Advanced Drainage Systems by 1.8% in the second quarter. Baird Financial Group Inc. now owns 21,049 shares of the construction company’s stock worth $2,418,000 after acquiring an additional 382 shares in the last quarter. Brown Advisory Inc. raised its holdings in Advanced Drainage Systems by 14.0% during the 2nd quarter. Brown Advisory Inc. now owns 4,784 shares of the construction company’s stock worth $549,000 after buying an additional 588 shares during the period. Jump Financial LLC acquired a new stake in Advanced Drainage Systems during the 2nd quarter worth approximately $403,000. Finally, California Public Employees Retirement System boosted its holdings in shares of Advanced Drainage Systems by 2.2% in the second quarter. California Public Employees Retirement System now owns 101,512 shares of the construction company’s stock valued at $11,660,000 after buying an additional 2,206 shares during the period. Institutional investors own 89.83% of the company’s stock.

Wall Street Analysts Forecast Growth

WMS has been the subject of several recent research reports. Royal Bank Of Canada reissued an “outperform” rating and issued a $176.00 price target on shares of Advanced Drainage Systems in a research report on Thursday, January 15th. Oppenheimer boosted their price target on Advanced Drainage Systems from $175.00 to $180.00 and gave the company an “outperform” rating in a research note on Thursday, January 15th. UBS Group increased their price objective on Advanced Drainage Systems from $183.00 to $197.00 and gave the stock a “buy” rating in a research note on Tuesday, January 6th. Barclays boosted their target price on shares of Advanced Drainage Systems from $181.00 to $187.00 and gave the company an “overweight” rating in a research note on Thursday, January 15th. Finally, KeyCorp lifted their price target on shares of Advanced Drainage Systems from $170.00 to $180.00 and gave the company an “overweight” rating in a report on Monday, January 26th. Eight investment analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $165.33.

Advanced Drainage Systems Company Profile

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.