Advanced Drainage Systems: Investor Day Recap - The Flywheel in Motion, Driving Future Value

Research evidence excerpt

Advanced Drainage Systems: Investor Day Recap - The Flywheel in Motion, Driving Future Value

Deutsche Bank

Research

Rating Company Date

Buy Advanced Drainage 22 June 2026

Systems

North America Reuters Bloomberg Rating Buy

United States WMS.N WMS US Price target (USD) 175.00 Price at 18 Jun 26 147.12

52-week range 175.38 – 110.89

Industrials

US Building Products Valuation & Risks

Investor Day Recap - The Flywheel in Motion,

Driving Future Value CollinResearchVerronAnalyst

+1-212-250-5181

WMS framed itself as a resilient, “pure-play water management solutions

provider,” with a differentiated growth story. FY30 targets were in line with our

expectations: revenue >$4B, organic sales growth >8%, adjusted EBITDA >$1.2B,

and adjusted EBITDA margin >30%. Management is focused on converting

profitable growth into cash for reinvestment into product innovation and

engineering and manufacturing capabilities, M&A, and shareholder returns,

creating a value flywheel.

Secular growth trends in $16 billion market. WMS highlighted addressable

markets of $14 billion in stormwater (~17% market share) and $2 billion in

wastewater (~33% market share). Key drivers underpinning market growth

include aging & overburdened infrastructure, increasingly frequent and intense

storm events, the need for innovative ways for water reuse and to protect water

supply from pollution. WMS sees these markets growing in the low- to mid-single-

digit range and management is focused on outpacing the market with significant

capital firepower to invest in innovation and M&A.

Significant Capital Firepower: Its strong sales growth targets (8%+), EBITDA

margin (30%+), operating cash flow conversion (70%+ of adjusted EBITDA), and

flexible balance sheet are expected to support ~$5B of allocable capital from