Update shared on 30 Nov 2025
Fair value Decreased 0.39%Analysts have slightly revised their price target for Advanced Drainage Systems, lowering it from $171.78 to $171.10, citing continued end-market strength and robust segment performance, even as there is some moderation in residential-exposed businesses.
Analyst Commentary
Recent price target adjustments and research updates reflect a nuanced view of Advanced Drainage Systems’ performance and outlook, with analysts highlighting several areas of strength and caution.
Bullish Takeaways
- Analysts point to broad-based upside across multiple business segments, driving sustained growth and ongoing positive financial results.
- There has been an impressive year-over-year increase in adjusted EBITDA, reinforcing the company’s strong execution and operational efficiency.
- The company continues to deliver strong performance in its end markets, which has led to increased price targets and continued confidence in valuation upside.
- Management’s decision to reiterate its end-market outlook demonstrates confidence in the company’s positioning and long-term growth trajectory.
Bearish Takeaways
- Some caution remains around the potential for further declines in residential-exposed businesses, which could moderate overall growth momentum.
- Analysts acknowledge the risk that outperformance in other segments may not fully offset headwinds in the residential market.
- There is valuation sensitivity if growth in key nonresidential segments slows or if market conditions shift unfavorably.
What's in the News
- Advanced Drainage Systems completed the repurchase of 8,244,000 shares, representing 11.41% of shares outstanding, for $852.26 million under the buyback program announced on February 3, 2022 (Key Developments).
- No shares were repurchased in the most recent tranche from July 1, 2025 to September 30, 2025. This signals the completion of the latest buyback activity (Key Developments).
Valuation Changes
- The Fair Value Estimate has decreased slightly from $171.78 to $171.10.
- The Discount Rate has fallen marginally from 8.61% to 8.59%.
- The Revenue Growth Projection has edged lower from 5.21% to 5.09%.
- The Net Profit Margin has decreased modestly from 17.32% to 17.18%.
- The Future P/E Ratio has increased slightly from 28.49x to 28.71x.
Disclaimer
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