Valuation Analysis of Advanced Drainage Systems
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy WMS?
Source: Yahoo Finance
- Stock Performance: Advanced Drainage Systems' stock recently closed at $170.98, with a 7.3% return over the past 30 days, a 14.3% year-to-date return, and a 35.4% return over the last year, indicating volatility in the short term while showcasing long-term growth potential.
- Cash Flow Analysis: According to the Discounted Cash Flow (DCF) model, the company's free cash flow for the last twelve months was approximately $604.4 million, with projections dropping to $553.6 million by 2027, suggesting challenges in sustaining future cash flows.
- Valuation Outcome: The estimated intrinsic value per share is about $110.69 based on a two-stage DCF approach, indicating that the stock is overvalued by 54.5% compared to its current price, which may affect investor confidence.
- P/E Ratio Comparison: The current P/E ratio stands at 28.3x, exceeding the building industry average of 23.1x and the peer average of 21.0x, although it is below Simply Wall St's fair ratio of 30.5x, suggesting a relatively optimistic market outlook on its growth prospects.
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Analyst Views on WMS
Wall Street analysts forecast WMS stock price to rise
7 Analyst Rating
7 Buy
0 Hold
0 Sell
Strong Buy
Current: 169.950
Low
168.00
Averages
178.67
High
197.00
Current: 169.950
Low
168.00
Averages
178.67
High
197.00
About WMS
Advanced Drainage Systems, Inc. is a manufacturer of stormwater and onsite wastewater solutions. The Company and its subsidiary, Infiltrator Water Technologies, LLC, provide stormwater drainage and onsite wastewater products used in a wide variety of markets and applications, including commercial, residential, infrastructure and agriculture, while delivering customer service. Its pipe segment manufactures and markets thermoplastic corrugated pipe throughout the United States. Its infiltrator segment is a provider of plastic leachfield chambers and systems, septic tanks and accessories, primarily for use in residential applications. Its international segment manufactures and markets products in regions outside the United States, with a strategy focused on its owned facilities in Canada and those markets serviced through its joint ventures in Mexico and South America. Its other segments manufacture a range of allied products and other that are complementary to their pipe products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Valuation Analysis of Advanced Drainage Systems
- Stock Performance: Advanced Drainage Systems' stock recently closed at $170.98, with a 7.3% return over the past 30 days, a 14.3% year-to-date return, and a 35.4% return over the last year, indicating volatility in the short term while showcasing long-term growth potential.
- Cash Flow Analysis: According to the Discounted Cash Flow (DCF) model, the company's free cash flow for the last twelve months was approximately $604.4 million, with projections dropping to $553.6 million by 2027, suggesting challenges in sustaining future cash flows.
- Valuation Outcome: The estimated intrinsic value per share is about $110.69 based on a two-stage DCF approach, indicating that the stock is overvalued by 54.5% compared to its current price, which may affect investor confidence.
- P/E Ratio Comparison: The current P/E ratio stands at 28.3x, exceeding the building industry average of 23.1x and the peer average of 21.0x, although it is below Simply Wall St's fair ratio of 30.5x, suggesting a relatively optimistic market outlook on its growth prospects.
See More
ACK Asset Management Acquires $40M Stake in Rogers
- New Investment Disclosure: On February 13, 2026, ACK Asset Management LLC disclosed a new position in Rogers (NYSE: ROG), acquiring 436,707 shares in an estimated $39.99 million trade, reflecting confidence in the company's future prospects.
- Asset Allocation Insight: This acquisition represents 5.0% of ACK's 13F assets under management as of December 31, 2025, indicating a significant concentration in industrial and infrastructure investments within their portfolio.
- Performance Highlights: Rogers reported $216.0 million in third-quarter sales, a 6.5% sequential increase, with gross margins expanding to 33.5%, showcasing strong performance driven by robust demand in electric vehicles and wireless infrastructure.
- Market Outlook: Despite a 25% increase in Rogers' stock price over the past year, it still trades below peak margins seen in stronger cycles, prompting long-term investors to monitor margin sustainability and recovery potential in the EV and aerospace sectors.
See More
ACK Asset Management Exits Centuri Holdings Position Worth $29 Million
- Complete Exit: ACK Asset Management fully exited its position in Centuri Holdings (NYSE:CTRI) by selling 1,375,000 shares for approximately $29.11 million, indicating a cautious outlook on the company's future performance.
- Quarter-End Valuation Decline: This transaction resulted in a $29.11 million decline in the value of ACK's Centuri holdings at the end of the fourth quarter, reflecting concerns about the company's growth potential despite its strong performance.
- Strong Performance Yet Skepticism: Although Centuri posted record quarterly revenue of $850 million in November 2026, up 18.1% year-over-year, ACK's exit suggests a lack of confidence in the company's valuation and sustainable returns, potentially impacting investor sentiment.
- Market Performance Comparison: Centuri's shares rose 45.9% over the past year, significantly outperforming the S&P 500 by 33 percentage points; however, ACK's exit may prompt a reevaluation of the company's future performance in light of ongoing demand for infrastructure modernization.
See More
Advanced Drainage Systems Prices $500M Senior Notes Offering
- Bond Offering Size: Advanced Drainage Systems announced a private offering of $500 million in senior unsecured notes at a 5.375% interest rate, expected to close on February 27, 2026, which will enhance the company's capital structure and provide funding for future investments.
- Credit Facility Adjustments: The company plans to amend its existing senior secured credit facility, increasing the revolving credit facility from $600 million to $750 million and raising the term loan “B” from $408 million to $600 million, thereby improving liquidity and financial flexibility.
- Use of Proceeds: The net proceeds from the offering will be used to refinance the outstanding balance under the existing senior secured credit facility and redeem all of the company’s outstanding 5.000% senior notes due 2027, ensuring financial stability and optimizing the capital structure.
- Strengthening Strategic Goals: Through this bond issuance and credit facility expansion, Advanced Drainage Systems not only solidifies its financial foundation but also lays the groundwork to achieve its $3.015 billion revenue target, demonstrating the company's confidence in future growth.
See More
Advanced Drainage Systems Plans $500M Bond Offering
- Bond Offering Plan: Advanced Drainage Systems intends to privately place up to $500 million of senior unsecured notes due in 2034, which will enhance the company's capital structure and provide funding for future growth initiatives.
- Credit Facility Amendment: The company plans to amend its senior secured credit facility to increase the revolving credit line to $750 million and raise the term loan B to $600 million, extending the maturity to enhance liquidity and financial flexibility.
- Debt Refinancing Strategy: Proceeds from the offering will be used to refinance existing credit facility debt and redeem the 5.000% senior notes due in 2027, aiming to reduce interest expenses and optimize capital costs.
- General Corporate Purposes: Any remaining proceeds will be allocated for general corporate purposes, indicating the company's financial management flexibility and readiness for future investment opportunities.
See More
ADS Plans $500 Million Senior Unsecured Notes Offering
- Bond Offering Announcement: ADS has announced its intention to offer up to $500 million in senior unsecured notes due 2034, aiming to enhance financial flexibility and optimize its capital structure through a private placement exempt from registration.
- Credit Facility Amendments: The company plans to amend its existing senior secured credit facility, increasing the revolving credit line from $600 million to $750 million and raising the term loan 'B' from $408 million to $600 million, thereby bolstering liquidity to navigate market fluctuations.
- Clear Use of Proceeds: The net proceeds from the bond offering will be utilized to refinance the outstanding balance under the existing senior secured credit facility and redeem all of the company's 5.000% senior notes due 2027, aiming to reduce financial costs and optimize capital structure.
- Compliance Statement: ADS emphasizes that the notes and related guarantees will not be registered in the U.S. and will only be offered to qualified institutional buyers, ensuring compliance with exemption provisions under securities laws to mitigate regulatory risks.
See More
Valuation Analysis of Advanced Drainage Systems
- Stock Performance: Advanced Drainage Systems' stock recently closed at $170.98, with a 7.3% return over the past 30 days, a 14.3% year-to-date return, and a 35.4% return over the last year, indicating volatility in the short term while showcasing long-term growth potential.
- Cash Flow Analysis: According to the Discounted Cash Flow (DCF) model, the company's free cash flow for the last twelve months was approximately $604.4 million, with projections dropping to $553.6 million by 2027, suggesting challenges in sustaining future cash flows.
- Valuation Outcome: The estimated intrinsic value per share is about $110.69 based on a two-stage DCF approach, indicating that the stock is overvalued by 54.5% compared to its current price, which may affect investor confidence.
- P/E Ratio Comparison: The current P/E ratio stands at 28.3x, exceeding the building industry average of 23.1x and the peer average of 21.0x, although it is below Simply Wall St's fair ratio of 30.5x, suggesting a relatively optimistic market outlook on its growth prospects.
See More
ACK Asset Management Acquires $40M Stake in Rogers
- New Investment Disclosure: On February 13, 2026, ACK Asset Management LLC disclosed a new position in Rogers (NYSE: ROG), acquiring 436,707 shares in an estimated $39.99 million trade, reflecting confidence in the company's future prospects.
- Asset Allocation Insight: This acquisition represents 5.0% of ACK's 13F assets under management as of December 31, 2025, indicating a significant concentration in industrial and infrastructure investments within their portfolio.
- Performance Highlights: Rogers reported $216.0 million in third-quarter sales, a 6.5% sequential increase, with gross margins expanding to 33.5%, showcasing strong performance driven by robust demand in electric vehicles and wireless infrastructure.
- Market Outlook: Despite a 25% increase in Rogers' stock price over the past year, it still trades below peak margins seen in stronger cycles, prompting long-term investors to monitor margin sustainability and recovery potential in the EV and aerospace sectors.
See More
ACK Asset Management Exits Centuri Holdings Position Worth $29 Million
- Complete Exit: ACK Asset Management fully exited its position in Centuri Holdings (NYSE:CTRI) by selling 1,375,000 shares for approximately $29.11 million, indicating a cautious outlook on the company's future performance.
- Quarter-End Valuation Decline: This transaction resulted in a $29.11 million decline in the value of ACK's Centuri holdings at the end of the fourth quarter, reflecting concerns about the company's growth potential despite its strong performance.
- Strong Performance Yet Skepticism: Although Centuri posted record quarterly revenue of $850 million in November 2026, up 18.1% year-over-year, ACK's exit suggests a lack of confidence in the company's valuation and sustainable returns, potentially impacting investor sentiment.
- Market Performance Comparison: Centuri's shares rose 45.9% over the past year, significantly outperforming the S&P 500 by 33 percentage points; however, ACK's exit may prompt a reevaluation of the company's future performance in light of ongoing demand for infrastructure modernization.
See More
Advanced Drainage Systems Prices $500M Senior Notes Offering
- Bond Offering Size: Advanced Drainage Systems announced a private offering of $500 million in senior unsecured notes at a 5.375% interest rate, expected to close on February 27, 2026, which will enhance the company's capital structure and provide funding for future investments.
- Credit Facility Adjustments: The company plans to amend its existing senior secured credit facility, increasing the revolving credit facility from $600 million to $750 million and raising the term loan “B” from $408 million to $600 million, thereby improving liquidity and financial flexibility.
- Use of Proceeds: The net proceeds from the offering will be used to refinance the outstanding balance under the existing senior secured credit facility and redeem all of the company’s outstanding 5.000% senior notes due 2027, ensuring financial stability and optimizing the capital structure.
- Strengthening Strategic Goals: Through this bond issuance and credit facility expansion, Advanced Drainage Systems not only solidifies its financial foundation but also lays the groundwork to achieve its $3.015 billion revenue target, demonstrating the company's confidence in future growth.
See More
Advanced Drainage Systems Plans $500M Bond Offering
- Bond Offering Plan: Advanced Drainage Systems intends to privately place up to $500 million of senior unsecured notes due in 2034, which will enhance the company's capital structure and provide funding for future growth initiatives.
- Credit Facility Amendment: The company plans to amend its senior secured credit facility to increase the revolving credit line to $750 million and raise the term loan B to $600 million, extending the maturity to enhance liquidity and financial flexibility.
- Debt Refinancing Strategy: Proceeds from the offering will be used to refinance existing credit facility debt and redeem the 5.000% senior notes due in 2027, aiming to reduce interest expenses and optimize capital costs.
- General Corporate Purposes: Any remaining proceeds will be allocated for general corporate purposes, indicating the company's financial management flexibility and readiness for future investment opportunities.
See More
ADS Plans $500 Million Senior Unsecured Notes Offering
- Bond Offering Announcement: ADS has announced its intention to offer up to $500 million in senior unsecured notes due 2034, aiming to enhance financial flexibility and optimize its capital structure through a private placement exempt from registration.
- Credit Facility Amendments: The company plans to amend its existing senior secured credit facility, increasing the revolving credit line from $600 million to $750 million and raising the term loan 'B' from $408 million to $600 million, thereby bolstering liquidity to navigate market fluctuations.
- Clear Use of Proceeds: The net proceeds from the bond offering will be utilized to refinance the outstanding balance under the existing senior secured credit facility and redeem all of the company's 5.000% senior notes due 2027, aiming to reduce financial costs and optimize capital structure.
- Compliance Statement: ADS emphasizes that the notes and related guarantees will not be registered in the U.S. and will only be offered to qualified institutional buyers, ensuring compliance with exemption provisions under securities laws to mitigate regulatory risks.
See More
