Advanced Drainage Systems has delivered four consecutive quarterly earnings beats with an average positive surprise of 14%, strong analyst upside of 31%, and improving momentum, though heavy concentration in stormwater products and a below-200-day-average price create near-term caution for new position additions.
Thesis pillars
- Perfect Earnings Beat Streak→Stable
- Analyst Upside Target→Stable
- High Quality Business Metrics→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed May 21, 2026
Advanced Drainage Systems, Inc. (WMS) Stock Analysis
Recovery setup
Industrials · Building Products & Equipment
Hold if already holding. Not a fresh buy at $136.52, but acceptable to hold if already in. Reasons: Concentration risk — Product: Stormwater (78.6%); Sector modifier (Industrials): -0.7.
Advanced Drainage Systems manufactures thermoplastic corrugated pipe and water management products across Stormwater (78.6% of fiscal 2026 net sales) and Wastewater segments, serving residential, non-residential, infrastructure, and agriculture markets through 64 manufacturing... Read more
Hold if already holding. Not a fresh buy at $136.52, but acceptable to hold if already in. Reasons: Concentration risk — Product: Stormwater (78.6%); Sector modifier (Industrials): -0.7. Chart setup: Death cross but MACD improving, RSI 78. Maintain position. Not compelling to add more. Score 6.2/10, moderate confidence.
Passes 6/9 gates (favorable risk/reward ratio, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and death cross (50MA < 200MA) and earnings proximity 5d<=7d. Suitability: moderate.
About Advanced Drainage Systems, Inc.
About Advanced Drainage Systems, Inc.
Advanced Drainage Systems reported Stormwater at 78.6% and Wastewater at 21.4% of net sales in fiscal 2026, with Stormwater contracting from 80.1% in fiscal 2025 and 82.2% in fiscal 2024 as the Wastewater segment grows. The company operates 64 manufacturing plants and 41 distribution centers across the United States, Canada, and Mexico, including six plants and seven distribution centers held through joint ventures. The ten largest customers represented approximately 50% of net sales in fiscal 2026, and the company completed the acquisition of National Diversified Sales in February 2026.
ADS earns revenue from selling corrugated pipe (single, double, and triple wall HDPE and polypropylene) plus allied products — storm retention chambers, PVC drainage structures, fittings, and water quality filters — to residential, non-residential, infrastructure, and agriculture customers through a national distribution network. The February 2026 acquisition of National Diversified Sales added residential channel drains, catch basins, and access boxes. Wastewater revenue flows from the Infiltrator subsidiary's leachfield chambers, onsite wastewater tanks, and treatment systems, and from Orenco Systems (acquired October 2024), which manufactures control panels, composites, and advanced treatment systems. Resin constitutes the principal raw material — more than 1.0 billion pounds purchased annually from approximately 450 suppliers, encompassing virgin HDPE and PP plus post-consumer and post-industrial recycled streams. The company operates its own delivery fleet, exposing costs to diesel fuel prices that are partially mitigated by a diesel hedging program. The 10-K notes polypropylene resin suppliers are limited and high-density polyethylene suppliers are geographically concentrated, introducing supply risk beyond price volatility.
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ADS revenue is exposed to three cyclically independent end markets that can contract simultaneously: residential housing (sensitive to mortgage rates and consumer confidence), non-residential construction (tied to commercial capex cycles), and infrastructure (dependent on public funding availability). The 10-K identifies each as a separate vulnerability — a residential slowdown, non-residential freeze, and municipal spending reduction could each independently reduce demand for the same product lines. The February 2026 NDS acquisition increases residential end-market exposure, and the 10-K notes approximately 30% of new North American single-family homes use onsite wastewater systems, linking a meaningful portion of Wastewater segment demand to housing starts.
See also: Industrials · Building Products & Equipment
From Advanced Drainage Systems, Inc.'s most recent 10-K filing, extracted June 16, 2026.
Recent developments
updated 2026-10-30Recent Developments — Advanced Drainage Systems, Inc.
Latest news
- NEWS Advanced Drainage Systems (WMS) Slips 2.7% as Resistance Holds – Support Levels in Focus - New Listing Stocks - dars.gov — dars.gov.et negative
- NEWS Advanced Drainage Systems (WMS) Slips 2.7% as Resistance Holds – Support Levels in Focus - ALMA Signal - dars.gov.et — dars.gov.et negative
- NEWS Advanced Drainage Systems (NYSE:WMS) Upgraded at Zacks Research - MarketBeat — MarketBeat positive
- NEWS Sei Investments Co. Purchases 10,741 Shares of Advanced Drainage Systems, Inc. $WMS - MarketBeat — MarketBeat neutral
- NEWS WMS|Advanced Drainage Systems Inc|Price:136.852|Chg%:-1.458 - TradingKey — TradingKey negative
Generated 2026-10-30T11:22:46Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHProductStormwater79%10-K Item 1: 'The table below summarizes the percentage of Net Sales for Stormwater and Wastewater ... Stormwater| 78.6 | %'
- MEDIUMCustomerten largest customers50%10-K Item 1A: 'Our ten largest customers generated approximately 50% of our net sales in fiscal 2026.'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $136.52, but acceptable to hold if already in. Reasons: Concentration risk — Product: Stormwater (78.6%); Sector modifier (Industrials): -0.7. Chart setup: Death cross but MACD improving, RSI 78. Maintain position. Not compelling to add more. Analyst target $158.10 (+15.8%), stop $129.82 (−5.2%), A.R:R 1.6:1. Score 6.2/10, moderate confidence.
Analyst target: $158.10 (+15.8% upside). Analyst target $158.10 (+15.8%), stop $129.82 (−5.2%), A.R:R 1.6:1. Stop-loss: $129.82.
Concentration risk — Product: Stormwater (78.6%); Sector modifier (Industrials): -0.7; Earnings in 5 days (event risk).
Advanced Drainage Systems, Inc. trades at a P/E of 23.3 (forward 18.6). TrendMatrix value score: 6.5/10. Verdict: Hold.
17 analysts cover WMS with a consensus score of 4.3/5. Average price target: $182.
What does Advanced Drainage Systems, Inc. do?Advanced Drainage Systems manufactures thermoplastic corrugated pipe and water management products across Stormwater...
Advanced Drainage Systems manufactures thermoplastic corrugated pipe and water management products across Stormwater (78.6% of fiscal 2026 net sales) and Wastewater segments, serving residential, non-residential, infrastructure, and agriculture markets through 64 manufacturing plants and 41 distribution centers. The ten largest customers represented approximately 50% of net sales in fiscal 2026, with demand tied to residential housing, non-residential construction, and infrastructure spending cycles.