Advanced Drainage Systems, Inc. (WMS)

Over the past six months, Advanced Drainage Systems, Inc. experienced several stock-impacting events. The company reported better-than-expected earnings for Q3 FY2026, leading to a stock price increase. Fiscal 2026 revenue and adjusted EBITDA guidance were raised, and the quarterly cash dividend was increased. A new stock repurchase authorization was approved, and the acquisition of National Diversified Sales (NDS) was completed. Several brokerages updated their ratings and price targets for WMS. The company also beat EPS in Q2 FY2026 and Q1 FY2026. As of February 6, 2026, the stock price had risen 11.0% over the past week, 13.7% over the past month, and 45.3% over the past year.

Demand for Advanced Drainage Systems' products and services is subject to typical seasonality affecting construction activity, particularly in colder months. Management has expressed caution regarding second-half demand due to potential weather volatility. Positive trends in domestic construction markets, especially in the Southern and Southeastern United States, and infrastructure sales influenced by federal funding are noted. While pipe revenue has seen some declines, the Infiltrators business has demonstrated significant growth.

Advanced Drainage Systems, Inc. (ADS) is a leading manufacturer of water management solutions, specializing in engineered solutions for stormwater and onsite septic wastewater industries. Founded in 1966, ADS has evolved into a diversified provider of comprehensive water management solutions, offering products such as thermoplastic corrugated pipes, plastic leachfield chambers, septic tanks, storm drains, and stormwater management technologies. The company operates through distinct reportable segments: Pipe, International, Infiltrator, and Allied Products & Other.

Advanced Drainage Systems has a significant market presence across North America and internationally. The company's products are available in all 50 U.S. states and approximately 80 countries worldwide. In 2020, 93% of the company's sales were generated in the United States, with 6% in Canada. ADS has owned facilities in Canada and operates through joint ventures in Mexico and South America.

Advanced Drainage Systems is recognized for its commitment to quality, sustainability, and customer support. The company emphasizes its role in providing sustainable water management solutions, recycling over half a billion pounds of plastic annually and achieving 50% lower greenhouse gas emissions. The ADS Foundation and The Nature Conservancy's Brightstorm Program collaborated to advance innovation in stormwater solutions, further enhancing the company's reputation in environmental stewardship.

Advanced Drainage Systems, Inc. has significant institutional ownership, with 92.20% held by institutional shareholders including Vanguard Group Inc, BlackRock, Inc., and UBS Asset Management Americas Inc. Insider ownership stands at 44.57%, with Berkshire Partners Holdings LLC being the largest individual shareholder, owning 24.00% of the company's shares.