Advanced Drainage Systems, Inc. (WMS) AI Stock Analysis

Advanced Drainage Systems, Inc. specializes in the design, manufacturing, and distribution of thermoplastic corrugated pipes and water management solutions essential for underground construction and infrastructure projects. Operating across the United States, Canada, Mexico, and globally, the company serves markets through four segments: Pipe, International, Infiltrator, and Allied Products & Other. Its product portfolio includes single, double, and triple wall polypropylene and polyethylene pipes used for stormwater management, agricultural irrigation, and residential drainage. It also provides plastic leachfield chambers, septic tanks, storm retention chambers, fittings, water filters, and geosynthetic fabrics. Founded in 1966 and based in Hilliard, Ohio, the company operates approximately 38 distribution centers.

Revenue grew from $2.77B in FY2022 to $3.07B in FY2023, declined 6.4% to $2.87B in FY2024, and recovered to $2.90B in FY2025 and $3.05B in FY2026, delivering a 5-year revenue CAGR of 9.0%. Gross margin shifted from 28.9% in FY2022 to a peak of 39.9% in FY2024 before settling at 36.3% in FY2026. Operating margin reached 22.5% in FY2026, with net income totaling $426.5M and diluted EPS at $6.27. In the latest quarter ended June 30, 2026, quarterly revenue growth accelerated to 20.6% year-over-year and quarterly earnings grew 18.8%, lifting trailing twelve-month revenue to $3.22B.

As of June 30, 2026, the company held $162.3M in cash and short-term investments against total debt of $1.77B, resulting in net debt of $1.60B and a debt-to-equity ratio of 0.95. Working capital liquidity remains supported by a current ratio of 2.12 across $4.51B in total assets. During FY2026, operating cash flow reached $819.1M, generating $569.3M in free cash flow. Advanced Drainage Systems deployed this capital toward $249.8M in capital expenditures, $92.0M in share buybacks, and $56.1M in dividends paid.

Trading at $128.20 as of October 16, 2026, the stock has a trailing P/E of 21.8x, below the median of its US-listed Industrials peers of 24.8x. However, its forward P/E of 20.8x and EV/EBITDA of 12.3x compare to sector peer medians of 17.2x and 13.9x, respectively. The stock trades at a price-to-sales multiple of 3.0x versus the peer median of 1.5x. Over the past year, the stock fell 8.3%, trailing the S&P 500 return of 16.8%, and its 5-year return of 16.2% lagged the S&P 500 return of 83.0%.

Advanced Drainage Systems pays an annual forward dividend of $0.80 per share, representing a dividend yield of 0.62% and a payout ratio of 11.2%. The dividend is distributed quarterly and has been paid for 13 consecutive years, with an annualized 5-year dividend growth rate of 14.2%. The last ex-dividend date was September 1, 2026.

Wall Street coverage consists of 9 Strong Buy ratings and 2 Buy ratings, with no Hold, Sell, or Strong Sell recommendations. The mean price target is $181.73, representing a 41.8% premium to the last close of $128.20. For the fiscal year ending March 31, 2027, consensus estimates project EPS of $6.29 on revenue of $3.46B, followed by EPS of $7.35 and revenue of $3.67B the following year. The company topped EPS estimates in all 4 of the last 4 quarters, and its next earnings date is November 5, 2026.

This page is an AI-written research summary of Advanced Drainage Systems, Inc. (WMS). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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