Advanced Drainage Systems (NYSE:WMS) Stock Price Up 7.8% After Better-Than-Expected Earnings

Shares of Advanced Drainage Systems, Inc. (NYSE:WMS) rose 7.8% during mid-day trading on Thursday following a better than expected earnings announcement. The stock traded as high as $173.07 and last traded at $172.7380. Approximately 623,397 shares traded hands during mid-day trading, a decline of 11% from the average daily volume of 696,708 shares. The stock had previously closed at $160.26.

The construction company reported $1.27 earnings per share for the quarter, topping the consensus estimate of $1.11 by $0.16. The firm had revenue of $693.35 million for the quarter, compared to the consensus estimate of $686.37 million. Advanced Drainage Systems had a net margin of 15.35% and a return on equity of 28.85%. The company’s revenue for the quarter was up .4% on a year-over-year basis. During the same period last year, the firm posted $1.09 earnings per share.

Advanced Drainage Systems Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Monday, March 16th. Shareholders of record on Monday, March 2nd will be paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date of this dividend is Monday, March 2nd. Advanced Drainage Systems’s dividend payout ratio (DPR) is 12.29%.

Advanced Drainage Systems News Summary

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

• Positive Sentiment: Q3 EPS beat and year-over-year improvement — ADS reported $1.27 EPS vs. a $1.11 consensus and $1.09 a year ago, signaling better profitability and driving investor confidence. Read More.
• Positive Sentiment: Revenue slightly beat estimates — Q3 sales of $693.35M topped analyst estimates (~$686M), showing the company can eke out growth in a mixed top-line environment. Read More.
• Positive Sentiment: Dividend increase — Board approved a quarterly cash dividend of $0.18 per share, up 13% year-over-year, which supports income-focused investors and signals confidence in cash flow. Read More.
• Positive Sentiment: Boosted share repurchase authorization — Management increased its buyback authorization alongside results, a direct capital-return action that can support the share price. Read More.
• Positive Sentiment: Strong profitability metrics — The company reported a net margin ~15.4% and ROE ~28.9%, indicating healthy profitability that helps justify current valuation multiples. Read More.
• Neutral Sentiment: Analyst metric analysis and previews — Several write-ups dig into non-GAAP metrics and what to watch next quarter; useful for modeling but not immediate stock drivers. Read More.
• Neutral Sentiment: Quarterly preview and deeper analyst commentary available — background reading for investors deciding whether the beat is sustainable. Read More.
• Negative Sentiment: Slow top-line growth — Revenue was only up ~0.4% year-over-year, which highlights demand softness in parts of the business and could limit longer-term upside if growth doesn’t re-accelerate. Read More.

Wall Street Analysts Forecast Growth

A number of brokerages recently commented on WMS. KeyCorp lifted their price objective on Advanced Drainage Systems from $170.00 to $180.00 and gave the stock an “overweight” rating in a research report on Monday, January 26th. UBS Group boosted their price target on shares of Advanced Drainage Systems from $183.00 to $197.00 and gave the company a “buy” rating in a research report on Tuesday, January 6th. Royal Bank Of Canada restated an “outperform” rating and set a $176.00 price objective on shares of Advanced Drainage Systems in a research report on Thursday, January 15th. Barclays lifted their target price on shares of Advanced Drainage Systems from $181.00 to $187.00 and gave the stock an “overweight” rating in a research note on Thursday, January 15th. Finally, Oppenheimer increased their price target on shares of Advanced Drainage Systems from $175.00 to $180.00 and gave the company an “outperform” rating in a research note on Thursday, January 15th. Eight research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $165.33.

Insider Activity 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 that occurred on Wednesday, December 3rd. The stock was sold at an average price of $152.82, for a total value of $1,615,154.58. Following the sale, the director owned 50,076 shares of the company’s stock, valued at $7,652,614.32. The trade was a 17.43% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Tim A. Makowski sold 4,901 shares of the firm’s stock in a transaction on Wednesday, November 12th. The stock was sold at an average price of $149.21, for a total value of $731,278.21. Following the transaction, the insider owned 2,467 shares of the company’s stock, valued at approximately $368,101.07. This represents a 66.52% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 97,772 shares of company stock valued at $14,605,539. 1.63% of the stock is owned by insiders.

Hedge Funds Weigh In On Advanced Drainage Systems

Several hedge funds have recently bought and sold shares of WMS. Truist Financial Corp acquired a new position in Advanced Drainage Systems in the 2nd quarter valued at about $211,000. Valeo Financial Advisors LLC lifted its position in shares of Advanced Drainage Systems by 134.8% during the second quarter. Valeo Financial Advisors LLC now owns 5,275 shares of the construction company’s stock worth $606,000 after purchasing an additional 3,028 shares in the last quarter. KLP Kapitalforvaltning AS boosted its stake in shares of Advanced Drainage Systems by 3.3% in the second quarter. KLP Kapitalforvaltning AS now owns 15,500 shares of the construction company’s stock valued at $1,780,000 after purchasing an additional 500 shares during the period. Louisiana State Employees Retirement System grew its holdings in shares of Advanced Drainage Systems by 0.5% in the second quarter. Louisiana State Employees Retirement System now owns 19,900 shares of the construction company’s stock valued at $2,286,000 after purchasing an additional 100 shares in the last quarter. Finally, Vanguard Personalized Indexing Management LLC grew its holdings in shares of Advanced Drainage Systems by 19.3% in the second quarter. Vanguard Personalized Indexing Management LLC now owns 7,395 shares of the construction company’s stock valued at $850,000 after purchasing an additional 1,196 shares in the last quarter. Institutional investors and hedge funds own 89.83% of the company’s stock.

Advanced Drainage Systems Stock Performance

The stock has a market capitalization of $13.24 billion, a PE ratio of 29.05, a P/E/G ratio of 2.08 and a beta of 1.34. The company has a debt-to-equity ratio of 0.75, a quick ratio of 2.60 and a current ratio of 3.48. The firm’s 50 day moving average is $152.14 and its two-hundred day moving average is $143.31.

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.