Advanced Drainage Systems (ADS) Earnings Preview: What to Expect on November 8th
Get ready for the upcoming earnings release of Advanced Drainage Systems (ADS), a leading provider of water management solutions, scheduled for Friday, November 8th, 2024. As investors eagerly await this announcement, let’s delve into the key factors to consider before the earnings call.
Analyst Expectations
Analysts are projecting an earnings per share (EPS) of $1.89 for ADS. While a beat on this estimate would certainly be welcomed by bulls, the real focus may be on the company’s guidance for the next quarter. Investors should remember that often, the market’s reaction is more influenced by the company’s outlook for future growth than simply a beat or miss on current earnings.
A Look at Recent Earnings Performance
During the last quarter, ADS missed EPS estimates by a slim margin of $0.01. This resulted in a 3.0% drop in the share price on the following trading day. Let’s examine ADS’s recent earnings history to gain a better perspective:
| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q1 2025 | $2.07 | $2.06 | -3.0% |
| Q4 2024 | $1.01 | $1.23 | 1.0% |
| Q3 2024 | $1.02 | $1.37 | 3.0% |
| Q2 2024 | $1.64 | $1.71 | 5.0% |
Current Market Sentiment and Analyst Opinions
Understanding market sentiment and analyst expectations is crucial for investors. For ADS, a total of 4 analysts have issued ratings, with the consensus being ‘Outperform’. The average one-year price target sits at $188.25, suggesting a potential upside of 15.12% from current levels.
Comparing ADS to its Peers
To gain a more comprehensive view, let’s compare ADS to its industry peers: Allegion, A.O. Smith, and Fortune Brands. Here’s a breakdown of their analyst ratings and average one-year price targets:
| Company | Consensus Rating | Average 1-Year Price Target | Potential Upside/Downside (%) |
|—|—|—|—|
| Allegion | Neutral | $145.2 | -11.2% |
| A.O. Smith | Neutral | $83.0 | -49.24% |
| Fortune Brands | Buy | $95.43 | 41.64% |
Peer Analysis Summary
| Company | Consensus Revenue Growth (%) | Gross Profit ($) | Return on Equity (%) |
|—|—|—|—|
| Advanced Drainage Systems | 4.79 | $332.45M | 12.28 |
| Allegion | 5.36 | $432.10M | 11.63 |
| A.O. Smith | -3.72 | $337.30M | 6.27 |
| Fortune Brands | 6.56 | $541M | 5.81 |
Key Takeaways from the Peer Analysis:
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Revenue Growth:
ADS ranks top among its peers with a 4.79% revenue growth rate.*
Gross Profit:
ADS falls in the middle ground among its peers in terms of gross profit.*
Return on Equity:
ADS shines with the highest return on equity, highlighting its efficient use of equity capital.A Closer Look at Advanced Drainage Systems’s Business and Financial Performance
Advanced Drainage Systems Inc. (ADS) is a recognized leader in the water management industry. The company specializes in designing, manufacturing, and marketing thermoplastic corrugated pipe and other related products across North and South America, as well as Europe. ADS’s operations are divided into several segments: Pipe, Infiltrator, International, Allied Products, and Other. The Pipe segment contributes the largest share of the company’s revenue.
ADS serves a wide range of industries, including Agriculture, Aviation and Military, Mining, Residential, Transportation, Healthcare, Education, and more.
Key Financial Metrics
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Market Capitalization:
ADS’s market capitalization falls below the industry average, indicating a relatively smaller scale compared to its peers.*
Revenue Growth:
As of June 30th, 2024, ADS achieved a remarkable 4.79% revenue growth rate, exceeding the average growth rate among its peers in the Industrials sector.*
Net Margin:
ADS boasts a net margin that surpasses industry standards, showcasing its strong financial performance and effective cost management (19.8%).*
Return on Equity (ROE):
ADS’s ROE stands out, exceeding industry averages. With an impressive ROE of 12.28%, the company demonstrates efficient use of equity capital.*
Return on Assets (ROA):
ADS’s ROA outperforms industry norms, reflecting effective asset utilization and strong financial performance (4.81%).*
Debt Management:
ADS maintains a debt-to-equity ratio that is below industry averages, signifying a sound financial structure with a ratio of 1.0.To stay updated on all of ADS’s earnings releases, visit our earnings calendar.
