Advanced Drainage Systems (NYSE:WMS) Releases Quarterly Earnings Results, Beats Estimates By $0.39 EPS

Advanced Drainage Systems (NYSE:WMS) announced its quarterly earnings results on Thursday. The construction company reported $2.49 earnings per share for the quarter, beating analysts’ consensus estimates of $2.10 by $0.39, Zacks reports. The firm had revenue of $1 billion for the quarter, compared to analyst estimates of $991.39 million. Advanced Drainage Systems had a net margin of 14.00% and a return on equity of 28.28%. The business’s revenue was up 20.6% on a year-over-year basis. During the same quarter in the previous year, the firm posted $1.95 earnings per share.

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

• Strong first-quarter results: Revenue surpassed $1 billion, up 21% year over year, while organic sales rose 9% and adjusted EBITDA increased 29% to $358 million, producing a 35.8% margin.
• Diversification supported outperformance: Non-residential sales grew 14% organically, wastewater revenue increased 8%, and stormwater storage products rose 18%, helping offset weakness in residential construction and retail.
• NDS integration is progressing: NDS generated $95 million of revenue in the quarter and performed strongly, although management said meaningful cross-selling synergies are still ahead and cautioned that the first quarter is typically its strongest.
• Near-term margin pressure is expected: Approximately $25 million-$30 million of revenue was pulled into the first quarter ahead of price increases, while higher resin and transportation costs are expected to weigh more heavily in the second and third quarters, causing sequential margin compression beyond the normal 300 basis points.
• Guidance and financial flexibility were maintained: Full-year revenue guidance remains $3.35 billion-$3.55 billion and adjusted EBITDA guidance remains $1.0 billion-$1.05 billion; free cash flow was $203 million, net leverage was approximately 1.5 times, and the company repurchased about $250 million of shares and dividends in the quarter.

Advanced Drainage Systems Price Performance

Advanced Drainage Systems stock traded down $4.17 during mid-day trading on Friday, reaching $144.28. 825,757 shares of the company were exchanged, compared to its average volume of 655,971. The firm has a market cap of $11.06 billion, a PE ratio of 24.92, a PEG ratio of 1.60 and a beta of 1.27. The company has a fifty day simple moving average of $143.85 and a 200-day simple moving average of $147.96. Advanced Drainage Systems has a 12 month low of $128.03 and a 12 month 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 1.35.

Advanced Drainage Systems Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 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, September 1st. Advanced Drainage Systems’s dividend payout ratio (DPR) is 14.71%.

Institutional Investors Weigh In On Advanced Drainage Systems

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. Northwestern Mutual Wealth Management Co. boosted its stake in Advanced Drainage Systems by 352.0% in the second quarter. Northwestern Mutual Wealth Management Co. now owns 226 shares of the construction company’s stock valued at $26,000 after buying an additional 176 shares in the last quarter. Baird Financial Group Inc. lifted its stake in shares of Advanced Drainage Systems by 1.8% in the 2nd quarter. Baird Financial Group Inc. now owns 21,049 shares of the construction company’s stock valued at $2,418,000 after acquiring an additional 382 shares during the last quarter. Brown Advisory Inc. lifted its stake in shares of Advanced Drainage Systems by 14.0% in the 2nd quarter. Brown Advisory Inc. now owns 4,784 shares of the construction company’s stock valued at $549,000 after acquiring an additional 588 shares during the last quarter. Jump Financial LLC acquired a new stake in shares of Advanced Drainage Systems during the 2nd quarter valued at $403,000. Finally, California Public Employees Retirement System grew its position in Advanced Drainage Systems by 2.2% during the 2nd quarter. California Public Employees Retirement System now owns 101,512 shares of the construction company’s stock worth $11,660,000 after acquiring an additional 2,206 shares during the last quarter. 89.83% of the stock is currently owned by institutional investors.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on WMS. UBS Group restated a “buy” rating and issued a $207.00 price target on shares of Advanced Drainage Systems in a report on Friday. Jefferies Financial Group began coverage on shares of Advanced Drainage Systems in a research report on Thursday, June 11th. They issued a “buy” rating and a $175.00 price objective for the company. Weiss Ratings reiterated a “hold (c)” rating on shares of Advanced Drainage Systems in a research note on Friday, July 17th. Oppenheimer reduced their price target on Advanced Drainage Systems from $195.00 to $190.00 and set an “outperform” rating for the company in a report on Tuesday, May 26th. Finally, Robert W. Baird set a $206.00 price target on Advanced Drainage Systems in a research report on Friday. Seven equities research 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 currently has an average rating of “Moderate Buy” and an average price target of $188.38.

Advanced Drainage Systems News Roundup

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

• Positive Sentiment: Results exceeded expectations: Fiscal Q1 2027 EPS was $2.49, above the $2.10-$2.19 analyst estimates and up from $1.95 a year earlier. Revenue reached approximately $1.0 billion, beating the $991.4 million consensus estimate and increasing 20.6% year over year. Advanced Drainage Systems Announces First Quarter Fiscal 2027 Results
• Positive Sentiment: Dividend increased: The board approved a quarterly dividend of $0.20 per share, an 11% increase from the prior year. The dividend is payable September 15 to shareholders of record September 1. Advanced Drainage Systems Announces Quarterly Cash Dividend
• Neutral Sentiment: Fiscal 2027 outlook was broadly in line: Management forecast revenue of $3.4 billion to $3.6 billion, surrounding the roughly $3.5 billion consensus estimate. The range does not represent a clear upward revision that would materially improve investor expectations. Advanced Drainage Systems Q1 Earnings and Revenues Top Estimates
• Negative Sentiment: Cost pressures cloud the outlook: Commentary highlighted inflation and recycling-market factors that could pressure margins or limit the benefit of strong demand, causing investors to focus on forward profitability rather than the quarterly beat. WMS Q2 Deep Dive
• Negative Sentiment: Valuation may limit upside: At roughly 26.5 times earnings and a 1.61 PEG ratio, WMS is not an obvious deep-value stock. A comparison with Gibraltar Industries (ROCK) may encourage valuation-sensitive investors to favor the alternative. ROCK or WMS: Which Is the Better Value Stock Right Now?

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.