Latest news with #AdvancedDrainageSystems
Yahoo
3 days ago
- Business
- Yahoo
1 Cash-Producing Stock with Promising Prospects and 2 to Be Wary Of
While strong cash flow is a key indicator of stability, it doesn't always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning. Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up. Trailing 12-Month Free Cash Flow Margin: 7.6% Started by three friends in Seattle's historic Pike Place Market, Starbucks (NASDAQ:SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items. Why Does SBUX Give Us Pause? Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand Estimated sales growth of 4.3% for the next 12 months implies demand will slow from its six-year trend Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.6 percentage points Starbucks is trading at $91.90 per share, or 29.1x forward P/E. Dive into our free research report to see why there are better opportunities than SBUX. Trailing 12-Month Free Cash Flow Margin: 12.7% Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. Why Are We Wary of WMS? Customers postponed purchases of its products and services this cycle as its revenue declined by 2.8% annually over the last two years Earnings per share have dipped by 2.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term Free cash flow margin dropped by 6.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up Advanced Drainage's stock price of $115 implies a valuation ratio of 18.3x forward P/E. To fully understand why you should be careful with WMS, check out our full research report (it's free). Trailing 12-Month Free Cash Flow Margin: 4.1% Started as a mail-order tractor parts business, Tractor Supply (NASDAQ:TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer. Why Are We Positive On TSCO? Bold push to open new stores demonstrates an ambitious strategy to establish itself in underpenetrated territories Sales outlook for the upcoming 12 months implies the business will stay on its desirable six-year growth trajectory Stellar returns on capital showcase management's ability to surface highly profitable business ventures At $51.71 per share, Tractor Supply trades at 23.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
Business Insider
05-06-2025
- Business
- Business Insider
Advanced Drainage Systems (WMS) Gets a Buy from KeyBanc
In a report released today, Jeffrey Hammond from KeyBanc maintained a Buy rating on Advanced Drainage Systems (WMS – Research Report). The company's shares closed yesterday at $117.54. Confident Investing Starts Here: Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter According to TipRanks, Hammond is a 5-star analyst with an average return of 9.8% and a 60.10% success rate. Hammond covers the Industrials sector, focusing on stocks such as Hillenbrand, The Middleby, and Enpro. Currently, the analyst consensus on Advanced Drainage Systems is a Strong Buy with an average price target of $141.00, implying a 19.96% upside from current levels. In a report released today, Barclays also maintained a Buy rating on the stock with a $135.00 price target. WMS market cap is currently $9.44B and has a P/E ratio of 20.35. Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of WMS in relation to earlier this year. Most recently, in February 2025, DARIN S. HARVEY, the EVP, Supply Chain & Logistics of WMS sold 2,464.00 shares for a total of $308,000.00.
Yahoo
03-06-2025
- Business
- Yahoo
Unpacking Q1 Earnings: Zurn Elkay (NYSE:ZWS) In The Context Of Other HVAC and Water Systems Stocks
Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let's have a look at Zurn Elkay (NYSE:ZWS) and its peers. Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. The 9 hvac and water systems stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 2.1% while next quarter's revenue guidance was 0.7% below. In light of this news, share prices of the companies have held steady as they are up 2.8% on average since the latest earnings results. Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Zurn Elkay reported revenues of $388.8 million, up 4% year on year. This print exceeded analysts' expectations by 1.4%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts' adjusted operating income estimates but a significant miss of analysts' organic revenue estimates. Todd A. Adams, Chairman and Chief Executive Officer, commented, 'We had a solid start to 2025, delivering first quarter core sales(1) growth of 5% along with 25.2% adjusted EBITDA margins(1), an increase of 110 basis points year over year. We also returned significant capital to shareholders in the form of $77 million in share repurchases and $15 million in dividends while maintaining leverage(1) at 0.9x.' The stock is up 14.6% since reporting and currently trades at $35.69. Is now the time to buy Zurn Elkay? Access our full analysis of the earnings results here, it's free. Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings. AAON reported revenues of $322.1 million, up 22.9% year on year, outperforming analysts' expectations by 10.9%. The business had an incredible quarter with an impressive beat of analysts' EPS estimates and a solid beat of analysts' EBITDA estimates. AAON scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 2.5% since reporting. It currently trades at $93.40. Is now the time to buy AAON? Access our full analysis of the earnings results here, it's free. Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. Advanced Drainage reported revenues of $615.8 million, down 5.8% year on year, falling short of analysts' expectations by 6.8%. It was a disappointing quarter as it posted a miss of analysts' Infiltrators revenue estimates and full-year revenue guidance missing analysts' expectations significantly. Advanced Drainage delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 9.5% since the results and currently trades at $110.14. Read our full analysis of Advanced Drainage's results here. Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries. A. O. Smith reported revenues of $963.9 million, down 1.5% year on year. This print beat analysts' expectations by 1.1%. It was a strong quarter as it also logged an impressive beat of analysts' EBITDA estimates and a solid beat of analysts' organic revenue estimates. The stock is down 1.9% since reporting and currently trades at $63.60. Read our full, actionable report on A. O. Smith here, it's free. Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods. Lennox reported revenues of $1.07 billion, up 2.4% year on year. This result topped analysts' expectations by 4.6%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts' organic revenue estimates and a decent beat of analysts' EPS estimates. The stock is down 1.3% since reporting and currently trades at $551.78. Read our full, actionable report on Lennox here, it's free. The Fed's interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump's presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. 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Yahoo
15-05-2025
- Business
- Yahoo
Advanced Drainage (NYSE:WMS) Misses Q1 Sales Targets
Water management company Advanced Drainage Systems (NYSE:WMS) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 5.8% year on year to $615.8 million. The company's full-year revenue guidance of $2.9 billion at the midpoint came in 7.6% below analysts' estimates. Its non-GAAP profit of $1.03 per share was 6.2% below analysts' consensus estimates. Is now the time to buy Advanced Drainage? Find out in our full research report. Revenue: $615.8 million vs analyst estimates of $660.4 million (5.8% year-on-year decline, 6.8% miss) Adjusted EPS: $1.03 vs analyst expectations of $1.10 (6.2% miss) Adjusted EBITDA: $176.7 million vs analyst estimates of $184.1 million (28.7% margin, 4% miss) Management's revenue guidance for the upcoming financial year 2026 is $2.9 billion at the midpoint, missing analyst estimates by 7.6% and implying -0.1% growth (vs 0.9% in FY2025) EBITDA guidance for the upcoming financial year 2026 is $880 million at the midpoint, below analyst estimates of $937.6 million "demand continues to be impacted by higher interest rates and economic uncertainty. In addition, the fourth quarter had unfavorable winter weather conditions this year against an already difficult comparison of very favorable weather in the prior year" Operating Margin: 19%, down from 20.7% in the same quarter last year Free Cash Flow was -$5.31 million compared to -$29.76 million in the same quarter last year Market Capitalization: $9.44 billion Scott Barbour, President and Chief Executive Officer of ADS, commented, "In Fiscal 2025, domestic construction market sales increased 3% as we continued to drive above market performance through our material conversion strategy in the stormwater and onsite wastewater markets. Importantly, organic sales in our most profitable segments, Infiltrator and Allied Products, increased 4.6% and 2.5%, respectively, and the onsite wastewater and Allied products now represent a collective 44% of revenue. The resiliency demonstrated by this year's 30.6% Adjusted EBITDA margin is due in part to our strategy to grow these more profitable products to be a higher mix of the overall sales." Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Advanced Drainage grew its sales at an impressive 11.7% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Advanced Drainage's recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2.8% over the last two years. Advanced Drainage also breaks out the revenue for its most important segments, Pipe and Infiltrators, which are 51.7% and 19.9% of revenue. Over the last two years, Advanced Drainage's Pipe revenue (thermoplastic corrugated pipes) averaged 6.6% year-on-year declines. On the other hand, its Infiltrators revenue (wastewater treatment systems) averaged 10% growth. This quarter, Advanced Drainage missed Wall Street's estimates and reported a rather uninspiring 5.8% year-on-year revenue decline, generating $615.8 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 6.2% over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Advanced Drainage has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 21.1%. This result isn't too surprising as its gross margin gives it a favorable starting point. Analyzing the trend in its profitability, Advanced Drainage's operating margin rose by 5.3 percentage points over the last five years, as its sales growth gave it immense operating leverage. In Q1, Advanced Drainage generated an operating profit margin of 19%, down 1.7 percentage points year on year. Since Advanced Drainage's gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Advanced Drainage's EPS grew at an astounding 83.9% compounded annual growth rate over the last five years, higher than its 11.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Advanced Drainage's earnings to better understand the drivers of its performance. As we mentioned earlier, Advanced Drainage's operating margin declined this quarter but expanded by 5.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Advanced Drainage, its two-year annual EPS declines of 2.5% mark a reversal from its (seemingly) healthy five-year trend. We hope Advanced Drainage can return to earnings growth in the future. In Q1, Advanced Drainage reported EPS at $1.03, down from $1.23 in the same quarter last year. This print missed analysts' estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Advanced Drainage's full-year EPS of $5.87 to grow 7.7%. We struggled to find many positives in these results. Its Infiltrators revenue missed and its full-year revenue guidance fell short of Wall Street's estimates. Management stated that "demand continues to be impacted by higher interest rates and economic uncertainty. In addition, the fourth quarter had unfavorable winter weather conditions this year against an already difficult comparison of very favorable weather in the prior year". Overall, this was a weaker quarter. The stock remained flat at $120.69 immediately following the results. The latest quarter from Advanced Drainage's wasn't that good. One earnings report doesn't define a company's quality, though, so let's explore whether the stock is a buy at the current price. If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free.
Business Wire
15-05-2025
- Business
- Business Wire
Advanced Drainage Systems Announces Increase in Quarterly Cash Dividend
HILLIARD, Ohio--(BUSINESS WIRE)--Advanced Drainage Systems, Inc. (NYSE: WMS) ('ADS' or the 'Company'), a leading provider of innovative water management solutions in the stormwater and onsite wastewater industries, today announced that its Board of Directors (the 'Board') has approved a total annual cash dividend to its shareholders in the amount of $0.72 per share, a 13% increase over the prior year dividend amount. Scott Barbour, President and Chief Executive Officer of Advanced Drainage Systems commented, "The 13% increase in the cash dividend is predicated on the strength of our balance sheet, formidable cash generation, and ongoing commitment to returning capital to shareholders. In Fiscal 2025, we returned $119.7 million to shareholders through dividends and share repurchases. Our strong financial performance and operational excellence initiatives provide us with the confidence and financial flexibility to return excess cash to our shareholders while simultaneously continuing to invest in safety, capacity and productivity at both ADS and Infiltrator." The quarterly cash dividend amount of $0.18 per share will be paid on June 16, 2025, to shareholders of record at the close of business on May 30, 2025. About the Company Advanced Drainage Systems is a leading manufacturer of innovative stormwater and onsite wastewater solutions that manage the world's most precious resource: water. ADS and its subsidiary, Infiltrator Water Technologies, provide superior stormwater drainage and onsite wastewater products used in a wide variety of markets and applications including commercial, residential, infrastructure and agriculture, while delivering unparalleled customer service. ADS manages the industry's largest company-owned fleet, an expansive sales team, and a vast manufacturing network of approximately 64 manufacturing plants and 35 distribution centers. The company is one of the largest plastic recycling companies in North America, ensuring over half a billion pounds of plastic is kept out of landfills every year. Founded in 1966, ADS' water management solutions are designed to last for decades. To learn more, visit the Company's website at Forward Looking Statements Certain statements in this press release may be deemed to be forward-looking statements. These statements are not historical facts but rather are based on the Company's current expectations, estimates and projections regarding the Company's business, operations and other factors relating thereto. Words such as 'may,' 'will,' 'could,' 'would,' 'should,' 'anticipate,' 'predict,' 'potential,' 'continue,' 'expects,' 'intends,' 'plans,' 'projects,' 'believes,' 'estimates,' 'confident' and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; disruption or volatility in general business and economic conditions in the markets in which we operate; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets; uncertainties surrounding the integration and realization of anticipated benefits of acquisitions; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets; the risk associated with manufacturing processes; the effect of global climate change; our ability to protect against cybersecurity incidents and disruptions or failures of our IT systems; our ability to assess and monitor the effects of artificial intelligence, machine learning, and robotics on our business and operations; our ability to manage our supply purchasing and customer credit policies; our ability to control labor costs and to attract, train and retain highly qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; our ability to appropriately address any environmental, social or governance concerns that may arise from our activities; the risks associated with our current levels of indebtedness, including borrowings under our existing credit agreement and outstanding indebtedness under our existing senior notes; and other risks and uncertainties described in the Company's filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company's forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
