Shares of Advanced Drainage Systems, Inc. (NYSE: WMS) have garnered a consensus rating of “Moderate Buy” from ten brokerages currently covering the firm, according to a report by MarketBeat.com. Of these analysts, two have assigned a hold rating, while eight have issued buy ratings, reflecting a positive outlook for the company.
Analysts have set an average twelve-month price target of $157.11 for the stock. Recent research reports highlight optimistic adjustments in target prices. For instance, Barclays raised its target from $176.00 to $181.00 and classified the stock as “overweight” in a note dated December 8, 2023. Similarly, Royal Bank of Canada increased its price objective from $158.00 to $168.00, issuing an “outperform” rating on November 7, 2023. KeyCorp also raised its price target from $159.00 to $170.00 on the same day.
Strong Earnings Report and Dividend Announcement
Advanced Drainage Systems recently reported its quarterly earnings, revealing earnings per share (EPS) of $1.97 for the quarter ending November 6, 2023. This figure surpassed the consensus estimate of $1.70 by $0.27. The company reported revenue of $850.38 million, exceeding analyst projections of $802.49 million. This performance indicates a return on equity of 28.85% and a net margin of 15.35%. Notably, the revenue increased by 8.7% compared to the same quarter last year, when the company earned $1.70 EPS.
In addition to the earnings report, the company announced a quarterly dividend of $0.18 per share, paid on December 15, 2023. Stockholders of record as of December 1, 2023 received this dividend, representing an annualized amount of $0.72 and a yield of 0.5%. The company’s payout ratio currently stands at 12.29%.
Insider Transactions and Institutional Holdings
Recent insider transactions have also drawn attention. Director Robert M. Eversole sold 10,569 shares on December 3, 2023 for an average price of $152.82, amounting to a total of approximately $1.62 million. Following this sale, he retains 50,076 shares valued at around $7.65 million, marking a 17.43% decrease in his position.
Additionally, Thomas J. Sr. Waun, Executive Vice President, sold 1,272 shares on November 11, 2023, at an average price of $148.30, totaling around $188,637.60. His remaining shares are valued at approximately $118,195.10, reflecting a significant decrease in his holdings by 61.48%.
Institutional and hedge funds have shown considerable interest in Advanced Drainage Systems. Recent reports indicate that hedge fund Mirova increased its stake by 910.6% in the third quarter, now holding 9,752 shares valued at $1.35 million. Other firms, such as Swiss Life Asset Management Ltd and Achmea Investment Management B.V., have also raised their stakes during this period, indicating strong institutional support for the company.
Based in Hilliard, Ohio, Advanced Drainage Systems, Inc. is a prominent manufacturer and supplier of water management solutions in North America. The company’s expertise lies in the design, production, and distribution of high-density polyethylene (HDPE) drainage pipes and related products, addressing critical needs in stormwater management, on-site septic systems, and erosion control. As the company continues to thrive, its recent ratings and performance underscore its strong position in the market.
