Advanced Drainage Systems (NYSE:WMS) Announces Quarterly Earnings Results, Beats Expectations By $0.12 EPS

Advanced Drainage Systems (NYSE:WMS) issued its earnings results on Thursday. The construction company reported $1.07 earnings per share for the quarter, beating the consensus estimate of $0.95 by $0.12, FiscalAI reports. The company had revenue of $676.76 million during the quarter, compared to analysts’ expectations of $651.92 million. Advanced Drainage Systems had a return on equity of 26.63% and a net margin of 13.98%.Advanced Drainage Systems’s quarterly revenue was up 9.9% compared to the same quarter last year. During the same period in the prior year, the business posted $1.03 EPS.

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

• ADS delivered strong fiscal 2026 results, with fourth-quarter revenue up 10% to $677 million and adjusted EBITDA margin at 27.8%, while full-year free cash flow rose to $569 million. Management also said it exceeded the top end of both revenue and adjusted EBITDA guidance.
• The NDS acquisition is progressing well, and the company remains on track to achieve $25 million in annual cost synergies by year three. Management also highlighted meaningful revenue cross-selling opportunities across stormwater and wastewater channels.
• ADS significantly strengthened its balance sheet, extending weighted-average debt maturities to more than six years and lowering its weighted-average cost of debt to 5.65%. Year-end leverage was just 1.6x, even after the $1 billion NDS deal.
• Fiscal 2027 guidance reflects a choppy demand and cost environment, with revenue expected between $3.35 billion and $3.55 billion and adjusted EBITDA between $1 billion and $1.5 billion. The company expects flat overall volumes, pricing to offset inflation dollar-for-dollar, and about $300 million of revenue from NDS.
• Management is seeing both headwinds and offsets in key end markets: non-residential remains resilient, supported by large projects such as data centers, while single-family residential and agriculture are softer. ADS expects to outperform its markets through product bundling, logistics advantages, recycling, and continued share gains in higher-growth niches like advanced treatment and multifamily.

Advanced Drainage Systems Stock Down 1.6%

Shares of NYSE:WMS opened at $132.97 on Friday. Advanced Drainage Systems has a 52-week low of $105.14 and a 52-week high of $179.32. The firm has a market capitalization of $10.36 billion, a P/E ratio of 24.44, a P/E/G ratio of 1.42 and a beta of 1.33. The stock has a 50 day moving average price of $142.21 and a 200-day moving average price of $150.06. The company has a debt-to-equity ratio of 0.92, a quick ratio of 3.08 and a current ratio of 2.42.

Advanced Drainage Systems Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Monday, June 15th. Stockholders of record on Monday, June 1st will be given a $0.20 dividend. The ex-dividend date of this dividend is Monday, June 1st. This represents a $0.80 annualized dividend and a dividend yield of 0.6%. This is an increase from Advanced Drainage Systems’s previous quarterly dividend of $0.18. Advanced Drainage Systems’s dividend payout ratio is currently 11.98%.

Key Stories Impacting Advanced Drainage Systems

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

• Positive Sentiment: WMS beat fourth-quarter expectations with EPS of $1.07 versus $0.98 expected, and revenue of $676.8 million topped estimates of $651.9 million. Revenue rose 9.9% year over year, showing continued operating momentum. Advanced Drainage Systems earnings report
• Positive Sentiment: The company raised its quarterly dividend to $0.20 per share, an 11% increase, signaling confidence in cash flow and shareholder returns. Dividend increase announcement
• Positive Sentiment: Management outlined FY2027 revenue guidance of roughly $3.35 billion to $3.55 billion and adjusted EBITDA of $1.0 billion to $1.5 billion, which suggests continued growth after the NDS integration. FY2027 outlook article
• Neutral Sentiment: Analysts and commentators noted that the shares may be looking more attractive on valuation after the post-earnings pullback, but this is more of a potential setup than an immediate catalyst. Valuation after earnings beat
• Negative Sentiment: Despite the beat, coverage highlighted a cautious demand outlook, which appears to be limiting investor enthusiasm and contributing to the stock’s decline. Cautious demand outlook article

Analyst Ratings Changes

Several brokerages recently weighed in on WMS. Weiss Ratings restated a “hold (c)” rating on shares of Advanced Drainage Systems in a report on Monday, April 20th. KeyCorp dropped their target price on Advanced Drainage Systems from $198.00 to $185.00 and set an “overweight” rating for the company in a report on Friday. Barclays dropped their target price on Advanced Drainage Systems from $198.00 to $181.00 and set an “overweight” rating for the company in a report on Wednesday, April 8th. Royal Bank Of Canada restated an “outperform” rating and set a $168.00 target price on shares of Advanced Drainage Systems in a report on Friday. Finally, Oppenheimer restated an “outperform” rating and set a $195.00 target price (down from $200.00) on shares of Advanced Drainage Systems in a report on Friday, April 17th. Five research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $189.83.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the company. F m Investments LLC bought a new stake in shares of Advanced Drainage Systems in the 3rd quarter worth $220,000. Dark Forest Capital Management LP bought a new stake in shares of Advanced Drainage Systems in the 3rd quarter worth $219,000. DRW Securities LLC bought a new stake in shares of Advanced Drainage Systems in the 4th quarter worth $204,000. Equitable Holdings Inc. bought a new stake in shares of Advanced Drainage Systems in the 4th quarter worth $203,000. Finally, State of Wyoming increased its holdings in shares of Advanced Drainage Systems by 139.8% in the 4th quarter. State of Wyoming now owns 1,357 shares of the construction company’s stock worth $197,000 after purchasing an additional 791 shares in the last quarter. Institutional investors own 89.83% of the company’s stock.

About Advanced Drainage Systems

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.