Start here if you're new
what it is
Advanced Drainage sells pipes, septic systems, and stormwater gear that move water away from homes, roads, farms, and construction sites.
how it gets paid
Last year Advanced Drainage made $2.9B in revenue. Pipe was the main engine at $1.51B, or 52% of sales.
why it's growing
Revenue grew 1.0% last year. Gross margin was 39.2%, which helps explain why earnings held up better than you would expect from a drainage company.
what just happened
Latest quarter revenue hit $693.4M and EPS came in at $1.27, above the $1.20 estimate.
At a glance
B+ balance sheet — decent shape, but not bulletproof
15/100 earnings predictability — expect surprises
26.9x trailing p/e — priced about right
0.5% dividend yield — cash in your pocket every quarter
18.5% return on capital — nothing to write home about
xvary composite: 63/100 — average
What they do
Advanced Drainage sells pipes, septic systems, and stormwater gear that move water away from homes, roads, farms, and construction sites.
This looks like plastic pipe. It behaves like infrastructure. WMS has 63 plants and 39 distribution centers, so your contractor can get product fast and keep a jobsite moving. Infrastructure footprint → hard-to-replace factory and delivery network → so what: speed becomes pricing power when a delayed shipment can stall an entire project.
How they make money
$2.9B
annual revenue · their business grew +1.0% last year
Pipe
$1.51B
Septic chambers
$0.52B
Stormwater structures
$0.46B
Residential drainage and irrigation
$0.41B
The products that matter
drainage pipe and water-management systems
core drainage products
$2.9B revenue · entire disclosed business
this is the whole company as disclosed on this page: a $2.9B revenue base with a 16.0% net margin. boring product, attractive economics.
16.0% margin
residential stormwater and irrigation products
NDS portfolio
$1.0B acquisition · $1.5B TAM expansion
NDS was acquired for $1.0B, or $875M net of tax benefits, and management says it expands total addressable market by $1.5B. no standalone revenue is shown here yet — that's why integration matters.
channel expansion
Key numbers
26.9x
trailing p/e
P/E → years of current earnings you are paying for → so what: you are paying almost 27 years of trailing profit for a company expected to grow sales 5.0%.
32.5%
operating margin
Operating margin → profit after running the business but before interest and taxes → so what: this is a factory business earning software-looking margins.
18.5%
return on capital
Return on capital → profit earned on the money invested in the business → so what: WMS turns infrastructure assets into strong returns, not just bigger revenue.
$1.4B
long-term debt
Long-term debt → money owed over many years → so what: the balance sheet is usable, but debt still matters if construction demand softens.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $1.4B (10% of capital)
- net profit margin 17.4% — keeps 17 cents of every dollar in revenue
- return on equity 28% — $0.28 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in WMS 3 years ago → it's now worth $19,290.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Latest quarter revenue hit $693.4M and EPS came in at $1.27, above the $1.20 estimate.
Gross margin was 39.2%, which helps explain why earnings held up better than you would expect from a drainage company. The quarter showed WMS can still push profit through a mixed end market.
$693.4M
revenue
$1.27
eps
39.2%
gross margin
the number that mattered
Gross margin at 39.2% is the tell. Margin → money left after product costs → so what: WMS is proving this is not a commodity-only business.
-
advanced drainage systems (ads) is now a bigger, more-competitive entity.early last month, the company completed the purchase of national diversified sales (nds) from norma group se for $1.0 billion (or $875 million, net of tax benefits).
-
cash reserves provided the needed funding.
-
nds is a leader in supplying residential stormwater and irrigation products.
-
the addition enhances ads’ position in the wholesale distribution and retail sales channels.
-
the company’s total addressable market has expanded by $1.5 billion.
source: company earnings report, 2026
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What could go wrong
the #1 risk is polymer and trade-cost inflation hitting drainage pipe margins.
med
raw material and tariff pressure
WMS sells manufactured drainage products. if resin, transport, or trade costs move up faster than pricing, margin pressure shows up quickly.
this risk runs through the entire $2.9B revenue base and challenges the 16.0% net margin
med
NDS integration risk
the company just spent $1.0B on NDS, or $875M net of tax benefits. if the channels do not mesh or synergies take longer than expected, you paid up for a slower payoff.
the promised $1.5B market expansion only matters if it turns into growth and stable margins
med
construction and ag demand slowing
last year's revenue growth was only +1.0%, and earnings predictability is 15/100. that is not much cushion if end markets soften.
when growth is this thin, even a modest volume drop can make 26.9x earnings look expensive
combined, these risks threaten the exact things holding the story together: a 16.0% margin, a $2.9B revenue base, and confidence that the NDS deal can lift growth above +1.0%.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
may 21, 2026 report
you want the first clean read on how management talks about NDS integration, margin, and demand.
growth
revenue still stuck at +1.0%
if sales stay around +1.0% after the deal, the market is paying too much for too little acceleration.
risk
margin under raw-material pressure
the 16.0% net margin is doing a lot of work in this story. if it slips, the valuation argument weakens fast.
integration
whether NDS actually widens the channel
management says the deal expands total addressable market by $1.5B. next you need evidence in wholesale, retail, and growth.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak: they still like the tape.
risk profile
average
stability score 3 — this sits around the market's midpoint on risk. not a bunker stock, not chaos either.
chart momentum
top 20%
technical score 2 — the chart has been stronger than most, which helps explain why the stock sits near its $179 high.
earnings predictability
15 / 100
predictability this low means quarterly numbers can swing. if you're paying 26.9x earnings, that matters.
source: institutional data
Institutional activity
182 buyers vs. 185 sellers in 4q2025. total institutional holdings: 72.5M shares.
source: institutional data
Price targets
3-5 year target range
$85
$213
$168
current price
$149
target midpoint · 11% from current · 3-5yr high: $300 (+80% · 16% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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