Stock of the Day

September 27, 2019

Advanced Drainage Systems (WMS)

$128.32
+$3.13 (+2.5%)
Market Cap: $9.44B

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

Today's Trend

Advanced Drainage Systems, Inc. (NYSE: WMS) is receiving support from favorable analyst coverage and a strategic acquisition announcement. The stock is trading around $130, below its 50-day and 200-day moving averages, while the latest news provides potential catalysts for investor sentiment.

  • DA Davidson reaffirmed its “Buy” rating on Advanced Drainage Systems and set a $190 price target, implying substantial upside from the referenced price of $130.03. The call signals continued confidence in ADS’s earnings outlook and water-management business. Advanced Drainage Systems Stock Keeps Buy Rating at DA Davidson
  • ADS agreed to acquire StormTrap Investments for approximately $530 million. StormTrap provides engineered, large-volume stormwater systems designed for space-constrained projects. The deal could expand ADS’s product portfolio, strengthen its position in stormwater infrastructure and create cross-selling opportunities. Advanced Drainage Systems Announces Acquisition of StormTrap Investments
  • Sell-side brokerages collectively rate WMS a “Moderate Buy.” The consensus indicates generally constructive sentiment, although it is less bullish than a unanimous Buy rating and does not by itself provide a new earnings catalyst. Advanced Drainage Systems Rated Moderate Buy
  • The StormTrap transaction introduces potential near-term risks, including integration costs, execution challenges and the use of substantial capital. Investors may also require evidence that the acquisition will contribute meaningfully to ADS’s earnings and cash flow.
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