One-glance verdict
Within fair range
$104.49 our estimate vs market $127.88
Wall Street consensus: $183.92 (76.0% higher than our fair-value estimate)
22% above our estimate
Fundamentals snapshot
Advanced Drainage Systems, Inc.
WMS · NYQ · Industrials · Building Products & Equipment
Current price
$127.88
52-week range
$126.39 - $179.31
Market cap
$9.64B
Balance sheet
Watch
6.80x Adequate
Net debt $1.60B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 5.6% last year.
- Reward Returns 26.4% on equity, ahead of 66% of its peers.
- Risk Net debt grew 39.9% over 3 years.
- Risk Stock trades 3.0% above its 5-year average P/E.
What this company does
Advanced Drainage Systems, Inc.
Advanced Drainage Systems makes the large, ribbed plastic pipes and related products used to manage water at construction sites for buildings, roads, and farms. The company earns money by selling these essential items for projects that need to control stormwater runoff, wastewater, and drainage. Because these products are crucial for most new construction and infrastructure upgrades, the company's health is often tied to the overall construction market.
How the company got here
Founded in 1966 by two engineers, Advanced Drainage Systems started out making plastic pipes that offered a lightweight and durable alternative to traditional materials like concrete and metal. A key moment was its decision to focus on using recycled plastics, which made it one of the largest plastic recyclers in North America. The company grew steadily and went public on the New York Stock Exchange in 2014. Major acquisitions, like Infiltrator Water Technologies in 2019 and NDS in 2026, transformed it from just a pipe manufacturer into a broader provider of water management solutions for both stormwater and wastewater.
What it actually does
Think of Advanced Drainage Systems as a company that makes the unseen plumbing that protects our communities from water damage. They create a wide range of products, mostly from recycled plastic, designed to manage rainwater and wastewater. These products are used in construction projects for roads, housing developments, and large buildings to prevent flooding and safely handle sewage. Essentially, they provide the essential, but often invisible, infrastructure that keeps water flowing where it should.
Stormwater
This is the company's largest business area, making up the majority of its sales. It involves manufacturing and selling large corrugated pipes and other products that are used to collect and manage stormwater—the runoff from rain. Their customers are typically involved in large construction projects like building roads, commercial properties, and housing subdivisions. This segment helps prevent flooding by creating systems to channel and store excess rainwater underground.
Wastewater
This part of the business focuses on products for onsite septic systems, which are common in areas without a central sewer system. They manufacture things like plastic septic tanks and chambers that help treat and disperse wastewater from homes and businesses. This segment is a smaller but highly profitable piece of the company, primarily serving the residential construction market.
What management is betting on now
The company's leadership is focused on becoming a comprehensive water management solutions provider, moving beyond just selling pipes. They are investing heavily in innovation, highlighted by their new Engineering and Technology Center, to develop new products. A major part of their strategy involves growing through acquisitions (buying other companies) to expand their product offerings and enter new markets. They are also committed to sustainability by increasing their use of recycled materials, which not only helps the environment but also provides a cost advantage.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$112.43M
FY2025 Q3
$135.71M
FY2025 Q4
$-5.31M
FY2026 Q1
$222.38M
FY2026 Q2
$176.45M
FY2026 Q3
$183.57M
FY2026 Q4
$-13.11M
FY2027 Q1
$203.24M
Revenue
$1.00B
Net income
$168.52M
Diluted EPS
2.19
Operating cash flow
$260.39M
Free cash flow
$203.24M
Fetching…
Sources
Revenue
$676.76M
Net income
$32.90M
Diluted EPS
0.42
Operating cash flow
$39.92M
Free cash flow
$-13.11M
Fetching…
Sources
Revenue
$693.35M
Net income
$93.63M
Diluted EPS
1.19
Operating cash flow
$269.29M
Free cash flow
$183.57M
Fetching…
Sources
Revenue
$850.38M
Net income
$156.02M
Diluted EPS
1.99
Operating cash flow
$234.87M
Free cash flow
$176.45M
Fetching…
Sources
Revenue
$829.88M
Net income
$143.92M
Diluted EPS
1.84
Operating cash flow
$274.98M
Free cash flow
$222.38M
Fetching…
Sources
Revenue
$615.76M
Net income
$77.16M
Diluted EPS
0.99
Operating cash flow
$41.23M
Free cash flow
$-5.31M
Fetching…
Sources
Revenue
$690.54M
Net income
$81.23M
Diluted EPS
1.04
Operating cash flow
$189.94M
Free cash flow
$135.71M
Fetching…
Sources
Revenue
$782.61M
Net income
$130.38M
Diluted EPS
1.67
Operating cash flow
$166.90M
Free cash flow
$112.43M
Fetching…
Sources
Is it cheap or expensive?
Fair value $104.49 vs current price $127.88
Wall Street consensus is the average analyst price target: $183.92 (76.0% higher than our fair-value estimate).
Our most-likely fair value is $104.49 a share — about 18.3% away from today's price of $127.88, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $1.6B. Interest coverage 6.8x.
Net debt
$1.60B
Interest coverage
6.80x
Advanced Drainage Systems, Inc.'s profit covers its interest bill about 6.8 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
WMS
BASELINE
Advanced Drainage Systems, Inc.
Total debt $1.77B Interest coverage 6.80x This is the baseline the peer rows are being compared against.
Total debt $2.75B Interest coverage 6.02x -12% vs WMS Has roughly the same debt cushion as WMS.
Total debt $5.73B Interest coverage 6.11x -10% vs WMS Has roughly the same debt cushion as WMS.
Total debt $2.89B Interest coverage 12.77x +88% vs WMS Carries about 1.9x more debt cushion than WMS.
Total debt $5.24B Interest coverage 2.87x -58% vs WMS Carries about 2.4x less debt cushion than WMS.
What you should know
The case for and against WMS
3 Rewards
2 Risks
Rewards
-
Revenue grew 5.6% last year.
-
Returns 26.4% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 39.9% over 3 years.
-
Stock trades 3.0% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
21.79x
Forward P/E
17.24x
P/B
5.09x
P/S
2.99x
EV/EBITDA
11.90x
PEG ratio
1.21x
Profitability
How much profit each dollar creates
Gross margin
38.6%
Operating margin
26.3%
Net margin
14.0%
ROE
26.4%
ROA
11.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.97x
Current ratio
2.12x
Quick ratio
1.06x
Total debt
$1.77B
Total cash
$162.25M
Growth
How the business has been compounding
Revenue TTM
$3.22B
Revenue 5Y CAGR
2.4%
EPS TTM
5.87
EPS 5Y CAGR
-3.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$804.47M
Free CF TTM
$569.29M
FCF margin
17.7%
Dividend
Shareholder payout
Yield
0.6%
Payout ratio
12.6%
Last ex-div date
2026-09-01