📊 WMS Key Takeaways
Is Advanced Drainage Systems, Inc.. (WMS) a Good Investment?
Advanced Drainage Systems demonstrates exceptional operational efficiency with 23.8% operating margins and outstanding free cash flow generation ($582.4M, 24.5% FCF margin), supported by fortress-like liquidity (4.12x current ratio) and conservative leverage. However, fundamental growth stagnation—flat revenue (+1.0% YoY) and earnings (+0.0% YoY) with declining EPS (-10.7% YoY)—signals limited catalyst for shareholder value creation despite strong cash cow characteristics.
Why Buy Advanced Drainage Systems, Inc.. Stock? WMS Key Strengths
- Superior profitability with 39.2% gross margin, 23.8% operating margin, and 16.6% net margin
- Exceptional free cash flow generation of $582.4M (24.5% of revenue) with minimal CapEx needs
- Outstanding returns: ROE of 20.4% and ROA of 9.5% demonstrate efficient capital deployment
- Fortress balance sheet: Current ratio 4.12x, Quick ratio 3.08x, conservative 0.66x Debt/Equity leverage
- Robust cash position of $1.0B providing strategic flexibility
WMS Stock Risks: Advanced Drainage Systems, Inc.. Investment Risks
- Stagnant top-line growth at +1.0% YoY indicating limited market expansion or competitive pressures
- Earnings growth paralysis at 0.0% YoY coupled with 10.7% EPS decline suggests share dilution or market headwinds
- Mature business model with minimal growth visibility may limit upside potential for investors
- $1.3B long-term debt constrains financial flexibility despite manageable leverage ratios
- Insider activity flat at only 3 Form 4 filings in 90 days suggests limited management conviction
Key Metrics to Watch
- Revenue growth acceleration (current 1.0% YoY is insufficient)
- EPS trajectory reversal (10.7% YoY decline is unsustainable)
- Free cash flow sustainability and potential shareholder capital return initiatives
- Operating margin expansion or margin pressure from inflationary inputs
- Debt reduction progress and debt-to-EBITDA ratio trends
Advanced Drainage Systems, Inc.. (WMS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 24.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 4.12x current ratio provides a solid financial cushion.
WMS Profit Margin, ROE & Profitability Analysis
WMS vs Materials Sector: How Advanced Drainage Systems, Inc.. Compares
How Advanced Drainage Systems, Inc.. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Advanced Drainage Systems, Inc.. Stock Overvalued? WMS Valuation Analysis 2026
Based on fundamental analysis, Advanced Drainage Systems, Inc.. appears fundamentally strong relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Advanced Drainage Systems, Inc.. Balance Sheet: WMS Debt, Cash & Liquidity
WMS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Advanced Drainage Systems, Inc..'s revenue has grown significantly by 55% over the 5-year period, indicating strong business expansion. The most recent EPS of $6.08 reflects profitable operations.
WMS Revenue Growth, EPS Growth & YoY Performance
WMS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $662.4M | $81.2M | $1.04 |
| Q2 2025 | $780.2M | $130.4M | $1.67 |
| Q1 2025 | $815.3M | $143.9M | $1.84 |
| Q1 2024 | $778.0M | $161.4M | $2.06 |
| Q3 2023 | $655.2M | $73.7M | $0.86 |
| Q2 2023 | $706.5M | $75.4M | $0.88 |
| Q1 2023 | $669.3M | $76.0M | $0.87 |
| Q1 2022 | $508.6M | $70.5M | $0.83 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Advanced Drainage Systems, Inc.. Dividends, Buybacks & Capital Allocation
WMS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Advanced Drainage Systems, Inc.. (CIK: 0001604028)
📋 Recent SEC Filings
❓ Frequently Asked Questions about WMS
What is the AI rating for WMS?
Advanced Drainage Systems, Inc.. (WMS) has an AI rating of HOLD with 78% confidence, based on fundamental analysis of SEC EDGAR filings.
What are WMS's key strengths?
Claude: Superior profitability with 39.2% gross margin, 23.8% operating margin, and 16.6% net margin. Exceptional free cash flow generation of $582.4M (24.5% of revenue) with minimal CapEx needs.
What are the risks of investing in WMS?
Claude: Stagnant top-line growth at +1.0% YoY indicating limited market expansion or competitive pressures. Earnings growth paralysis at 0.0% YoY coupled with 10.7% EPS decline suggests share dilution or market headwinds.
What is WMS's revenue and growth?
Advanced Drainage Systems, Inc.. reported revenue of $2.4B.
Does WMS pay dividends?
Advanced Drainage Systems, Inc.. pays dividends, with $42.1M distributed to shareholders in the trailing twelve months.
Where can I find WMS SEC filings?
Official SEC filings for Advanced Drainage Systems, Inc.. (CIK: 0001604028) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is WMS's EPS?
Advanced Drainage Systems, Inc.. has a diluted EPS of $5.02.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is WMS a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Advanced Drainage Systems, Inc.. has a HOLD rating with 78% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is WMS stock overvalued or undervalued?
Valuation metrics for WMS: ROE of 20.4% (sector avg: 14%), net margin of 16.6% (sector avg: 10%). Higher ROE suggests strong returns relative to peers.
Should I buy WMS stock in 2026?
Our dual AI analysis gives Advanced Drainage Systems, Inc.. a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is WMS's free cash flow?
Advanced Drainage Systems, Inc..'s operating cash flow is $779.1M, with capital expenditures of $196.7M. FCF margin is 24.5%.
How does WMS compare to other Materials stocks?
Vs Materials sector averages: Net margin 16.6% (avg: 10%), ROE 20.4% (avg: 14%), current ratio 4.12 (avg: 1.6).