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California State Teachers Retirement System lifted its stake in shares of Advanced Drainage Systems, Inc. (NYSE:WMS – Free Report) by 15,172.0% in the second quarter, according to the company in its most recent disclosure with the SEC. The institutional investor owned 13,246,953 shares of the construction company’s stock after buying an additional 13,160,213 shares during the quarter. California State Teachers Retirement System owned approximately 17.57% of Advanced Drainage Systems worth $2,079,242,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also recently modified their holdings of WMS. Northwestern Mutual Wealth Management Co. increased its stake in Advanced Drainage Systems by 352.0% in the second quarter. Northwestern Mutual Wealth Management Co. now owns 226 shares of the construction company’s stock valued at $26,000 after purchasing an additional 176 shares during the last quarter. Baird Financial Group Inc. lifted its position in shares of Advanced Drainage Systems by 1.8% during the 2nd quarter. Baird Financial Group Inc. now owns 21,049 shares of the construction company’s stock worth $2,418,000 after buying an additional 382 shares during the last quarter. Brown Advisory Inc. boosted its holdings in shares of Advanced Drainage Systems by 14.0% in the 2nd quarter. Brown Advisory Inc. now owns 4,784 shares of the construction company’s stock valued at $549,000 after buying an additional 588 shares in the last quarter. Jump Financial LLC acquired a new position in shares of Advanced Drainage Systems in the 2nd quarter valued at $403,000. Finally, California Public Employees Retirement System grew its position in shares of Advanced Drainage Systems by 2.2% in the 2nd quarter. California Public Employees Retirement System now owns 101,512 shares of the construction company’s stock valued at $11,660,000 after buying an additional 2,206 shares during the last quarter. Institutional investors and hedge funds own 89.83% of the company’s stock.

Analyst Ratings Changes A number of equities research analysts have weighed in on WMS shares. Royal Bank Of Canada boosted their price objective on Advanced Drainage Systems from $170.00 to $178.00 and gave the company an “outperform” rating in a research note on Friday, August 7th. Jefferies Financial Group assumed coverage on shares of Advanced Drainage Systems in a research report on Thursday, June 11th. They set a “buy” rating and a $175.00 target price on the stock. Robert W. Baird set a $206.00 target price on shares of Advanced Drainage Systems in a report on Friday, August 7th. Zacks Research upgraded shares of Advanced Drainage Systems from a “strong sell” rating to a “hold” rating in a research report on Monday, July 27th. Finally, KeyCorp reissued an “overweight” rating on shares of Advanced Drainage Systems in a research report on Monday, June 22nd. One analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and two have assigned a Hold rating to the company. According to MarketBeat.com, Advanced Drainage Systems currently has a consensus rating of “Moderate Buy” and an average price target of $188.70.

View Our Latest Report on WMS Advanced Drainage Systems Stock Performance WMS opened at $128.12 on Friday. The stock has a market cap of $9.66 billion, a P/E ratio of 22.13, a P/E/G ratio of 1.39 and a beta of 1.28. The company has a debt-to-equity ratio of 0.95, a current ratio of 2.12 and a quick ratio of 1.18. The stock’s 50 day simple moving average is $142.38 and its 200 day simple moving average is $143.77. Advanced Drainage Systems, Inc. has a 1-year low of $126.39 and a 1-year high of $179.32.

Advanced Drainage Systems (NYSE:WMS – Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The construction company reported $2.49 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.10 by $0.39. Advanced Drainage Systems had a return on equity of 28.28% and a net margin of 14.00%.The firm had revenue of $1 billion during the quarter, compared to analysts’ expectations of $991.39 million. During the same period in the previous year, the firm posted $1.95 earnings per share. Advanced Drainage Systems’s revenue was up 20.6% on a year-over-year basis. As a group, equities analysts anticipate that Advanced Drainage Systems, Inc. will post 6.62 EPS for the current fiscal year.

Advanced Drainage Systems Dividend Announcement The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st will be issued a $0.20 dividend. This represents a $0.80 dividend on an annualized basis and a dividend yield of 0.6%. The ex-dividend date of this dividend is Tuesday, September 1st. Advanced Drainage Systems’s payout ratio is 13.82%.

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Advanced Drainage Systems, Inc (NYSE: WMS) designs and manufactures water management products for the construction, infrastructure, agriculture and residential markets. Founded in 1966 and headquartered in Hilliard, Ohio, the company is known for its thermoplastic corrugated pipe and related systems used to collect, convey, store and manage stormwater and wastewater.

Its product portfolio includes stormwater detention and infiltration systems, sanitary and septic sewer products, agricultural drainage systems, erosion and sediment control products, and water-quality solutions.

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Advanced Drainage Systems NYSE: WMS reported first-quarter fiscal 2027 net sales of $1 billion, up 21% from a year earlier, as organic growth, the contribution from NDS and customer purchases ahead of price increases supported results. The company said it recorded more than $1 billion in quarterly revenue for the first time.

Organic revenue, excluding NDS, rose 9%. However, management estimated that $25 million to $30 million of revenue was pulled into the first quarter from the second quarter as customers sought to purchase before price increases took effect. Excluding that pull-forward, organic revenue growth was in the mid-single digits.

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Adjusted EBITDA increased 29% to $358 million, producing a 35.8% adjusted EBITDA margin, up 230 basis points from 33.5% a year earlier. Chief Financial Officer Scott Cottrill said the margin was the company’s second highest on record.

Stormwater and wastewater performance Stormwater revenue increased 24% to $809 million, while organic stormwater sales rose 10%, driven by pipe and allied products. Wastewater revenue increased 8%, supported by double-digit growth in tanks and residential advanced-treatment products.

President and CEO Scott Barbour said non-residential organic sales grew 14%, with resilient activity in commercial construction and large projects such as data centers and warehouses. Management also cited growth in institutional construction and continued demand for water-quality, storage and capture products.

The company’s stormwater storage category within allied products grew 18% during the quarter. Barbour pointed to product additions in the StormTech chambers line, the acquisition of Cultec and a partnership to market Aquabox plastic crates in the U.S. for projects requiring a tighter footprint.

Residential sales increased 29%, primarily reflecting NDS. On an organic basis, overall residential results were flat. Infiltrator residential revenue rose by double digits, driven by tanks and residential advanced-treatment systems, while the company experienced weakness in retail and residential land development within stormwater. Barbour attributed residential-market pressure to affordability concerns and elevated interest rates.

NDS integration and recycling investments NDS contributed $95 million in quarterly sales and posted year-over-year growth, according to management. Barbour said the quarter was NDS’s strongest seasonal quarter, although the company is still assessing the acquired business’s longer-term seasonal patterns.

Management said it is pursuing cross-selling opportunities but has not yet generated substantial revenue from those efforts. The company has begun trial programs in certain geographies after completing training, customer-facing work and back-office preparations. Barbour also said some smaller facility-related integration efforts are substantially complete, while a larger facility program is expected to affect results next year.

Advanced Drainage Systems is also expanding its use of recycled materials as virgin raw-material costs rise. Its Cordele, Georgia, recycling facility expansion is nearing completion and has begun contributing to material-cost mitigation, Barbour said. The site is not expected to reach full capacity during fiscal 2027, with full capacity expected next year.

The Cordele project is designed to increase processing capacity and create a fully integrated recycling operation capable of producing finished materials. Management said the company is working to return high-density polyethylene recycled content to 50% as quickly as possible, although some product applications and public-project requirements require virgin materials.

Costs, margins and outlook The company maintained its fiscal 2027 outlook for net sales of $3.35 billion to $3.55 billion and adjusted EBITDA of $1 billion to $1.05 billion. It continues to expect 55% to 60% of annual revenue to occur in the first half, though the first- and second-quarter revenue pattern will be affected by the customer pull-forward.

Cottrill said non-residential demand has been modestly better than anticipated, while residential demand has been modestly worse. The company expects to continue outperforming its markets, but management indicated that growth rates should be closer to mid-single digits over the full year rather than the elevated first-quarter levels.

Material costs benefited first-quarter profitability because the company used inventory purchased at more favorable costs in the prior year. Cottrill said resin costs are expected to become a significant year-over-year headwind in the remainder of the fiscal year, peaking in the second and third quarters based on current procurement visibility. Transportation costs, including diesel and common-carrier expenses, are also expected to remain elevated.

As a result, management expects second-quarter EBITDA margin to decline by more than its typical sequential 300-basis-point reduction from the first quarter, reflecting product mix, seasonality and higher resin costs. The company said it expects pricing actions to offset inflationary pressures on a dollar-for-dollar basis for the full year.

Cash flow and capital allocation Free cash flow totaled $203 million in the first quarter. The company ended the period with net leverage of about 1.5 times and approximately $901 million of available liquidity.

Advanced Drainage Systems expects about $200 million of capital expenditures in fiscal 2027, including completion of the Cordele expansion, automation investments and added capacity at Infiltrator. Management said it repurchased $57 million of stock during the quarter and returned nearly $250 million to shareholders when including dividends. The company said it will continue to prioritize organic investment and strategic acquisitions, while using dividends and opportunistic repurchases to return excess capital to shareholders.

About Advanced Drainage Systems (NYSE:WMS)Advanced Drainage Systems, Inc NYSE: WMS is a leading manufacturer and supplier of water management solutions in North America. Headquartered in Hilliard, Ohio, the company specializes in the design, production and distribution of high-density polyethylene (HDPE) drainage pipe and related products. Its core business addresses stormwater management, on-site septic systems and erosion control for residential, commercial and infrastructure projects.

The company's product portfolio includes corrugated plastic pipe, tubing, fittings, geocells, geogrids and stormwater structures such as inlets, manholes and detention/retention systems.

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Advanced Drainage Systems (WMS - Free Report) came out with quarterly earnings of $2.49 per share, beating the Zacks Consensus Estimate of $2.19 per share. This compares to earnings of $1.95 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +13.70%. A quarter ago, it was expected that this maker of water drainage systems and pipes would post earnings of $1 per share when it actually produced earnings of $1.07, delivering a surprise of +7%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Advanced Drainage, which belongs to the Zacks Building Products - Miscellaneous industry, posted revenues of $1 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.48%. This compares to year-ago revenues of $829.88 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Advanced Drainage shares have added about 3.3% since the beginning of the year versus the S&P 500's gain of 12.8%.

What's Next for Advanced Drainage?While Advanced Drainage has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Advanced Drainage was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.94 on $942.69 million in revenues for the coming quarter and $6.55 on $3.45 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Miscellaneous is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Janus International Group, Inc. (JBI - Free Report) , is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11.

This company is expected to post quarterly earnings of $0.13 per share in its upcoming report, which represents a year-over-year change of -35%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Janus International Group, Inc.'s revenues are expected to be $235.9 million, up 3.4% from the year-ago quarter.