Shares of Advanced Drainage Systems, Inc. (NYSE: WMS) have received a consensus rating of “Moderate Buy” from ten brokerages currently covering the company, according to data from MarketBeat.com. Among these analysts, two have assigned a hold rating, while eight have recommended a buy. The average twelve-month price target stands at $157.11, reflecting confidence in the company’s growth potential.
Analysts have released multiple reports on the stock, highlighting positive adjustments to their price targets. For instance, on December 8, 2023, Barclays raised its target price from $176.00 to $181.00, designating the stock as “overweight.” Similarly, the Royal Bank of Canada increased its price objective from $158.00 to $168.00 on November 7, 2023, while also giving it an “outperform” rating. KeyCorp followed suit on the same day, adjusting their price target from $159.00 to $170.00, maintaining an “overweight” rating. Conversely, Weiss Ratings reaffirmed a “hold (c)” rating in a report dated October 8, 2023.
Financial Performance and Dividend Announcement
Advanced Drainage Systems reported its quarterly earnings on November 6, 2023, showcasing strong financial results. The firm achieved $1.97 earnings per share (EPS), surpassing analyst expectations of $1.70 by $0.27. The company’s revenue reached $850.38 million, significantly exceeding estimates of $802.49 million. This performance reflects an 8.7% increase in revenue compared to the same quarter last year, where the firm recorded $1.70 EPS.
In tandem with its financial success, Advanced Drainage Systems declared a quarterly dividend of $0.18 per share, which was paid on December 15, 2023. Shareholders of record as of December 1, 2023 received this dividend, resulting in an annualized dividend of $0.72 and a dividend yield of 0.5%. The company’s payout ratio currently stands at 12.29%, indicating effective management of its earnings.
Insider Transactions and Institutional Holdings
Recent insider transactions have provided additional context regarding stock ownership within the company. On December 3, 2023, Director Robert M. Eversole sold 10,569 shares at an average price of $152.82, totaling approximately $1.62 million. After the sale, Eversole retained 50,076 shares, valued at approximately $7.65 million. This transaction marked a 17.43% decrease in his position.
Additionally, Thomas J. Waun, Executive Vice President, sold 1,272 shares on November 11, 2023, at an average price of $148.30, amounting to $188,637.60. Post-sale, Waun holds 797 shares valued at about $118,195.10, reflecting a significant 61.48% decrease in his stake.
Over the past ninety days, insiders have sold a total of 97,772 shares, representing a value of $14.61 million. Currently, company insiders own 1.63% of Advanced Drainage Systems stock.
Investment from hedge funds has also been notable. In the third quarter, Mirova increased its stake in the company by 910.6%, acquiring 9,752 shares valued at approximately $1.35 million. Swiss Life Asset Management Ltd raised its holdings by 78.7%, while Achmea Investment Management B.V. grew its stake by 2.9%. Notably, institutional investors and hedge funds collectively own 89.83% of the company’s stock.
Advanced Drainage Systems, Inc., headquartered in Hilliard, Ohio, is a premier manufacturer and supplier of water management solutions across North America. The company specializes in high-density polyethylene (HDPE) drainage pipe and related products, serving residential, commercial, and infrastructure projects. Its diverse product range includes corrugated plastic pipes, tubing, fittings, and stormwater structures, addressing critical needs in stormwater management and erosion control.
