Advanced Drainage (WMS) Q3 Earnings: What To Expect

Water management company Advanced Drainage Systems (NYSE:WMS) will be reporting results tomorrow before market open. Here’s what you need to know.

Advanced Drainage missed analysts’ revenue expectations by 2% last quarter, reporting revenues of $815.3 million, up 4.8% year on year. It was a slower quarter for the company, with a miss of analysts’ EBITDA estimates.

Is Advanced Drainage a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Advanced Drainage’s revenue to grow 5% year on year to $819.4 million, a reversal from the 11.8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.89 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Advanced Drainage has missed Wall Street’s revenue estimates three times over the last two years.

Looking at Advanced Drainage’s peers in the hvac and water systems segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Lennox delivered year-on-year revenue growth of 9.6%, beating analysts’ expectations by 5.9%, and Northwest Pipe reported revenues up 9.7%, topping estimates by 2.4%. Lennox traded up 4.3% following the results while Northwest Pipe’s stock price was unchanged.

Read our full analysis of Lennox’s results here and Northwest Pipe’s results here.

There has been positive sentiment among investors in the hvac and water systems segment, with share prices up 6.3% on average over the last month. Advanced Drainage is up 6.4% during the same time and is heading into earnings with an average analyst price target of $182.88 (compared to the current share price of $163.52).

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