As you might know, Advanced Drainage Systems, Inc. (NYSE:WMS) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$830m arriving 4.2% ahead of forecasts. Statutory earnings per share (EPS) were US$1.84, 5.7% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Advanced Drainage Systems after the latest results.
Taking into account the latest results, Advanced Drainage Systems' seven analysts currently expect revenues in 2026 to be US$2.95b, approximately in line with the last 12 months. Statutory per share are forecast to be US$5.64, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$2.90b and earnings per share (EPS) of US$5.58 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Advanced Drainage Systems
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to US$155. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Advanced Drainage Systems at US$167 per share, while the most bearish prices it at US$130. This is a very narrow spread of estimates, implying either that Advanced Drainage Systems is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Advanced Drainage Systems' revenue growth is expected to slow, with the forecast 1.4% annualised growth rate until the end of 2026 being well below the historical 8.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Advanced Drainage Systems.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Advanced Drainage Systems going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Advanced Drainage Systems you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.