Advanced Drainage Systems Q2 sales miss estimates on soft demand
Overview
US water management firm's fiscal Q2 sales rose 4.6% but missed analyst expectations
Adjusted EPS for fiscal Q2 beat analyst expectations
Company repurchased $375.1 mln of stock and announced proposed StormTrap acquisition
Outlook
Company lowers fiscal 2027 net sales outlook to $3.3 bln-$3.4 bln
Company maintains fiscal 2027 Adjusted EBITDA outlook at $1.0 bln-$1.03 bln
Company expects lower inflationary pressure on materials to continue in second half
Result Drivers
NDS ACQUISITION - Co said Q2 sales and gross profit were boosted by the acquisition of National Diversified Sales (NDS)
PRICE/COST MANAGEMENT - Favorable price/cost more than offset unfavorable volume and transportation costs, supporting profitability
SOFT DEMAND - Co said demand environment was softer than expected, citing higher interest rates and geopolitical uncertainty
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | $889.41 mln | $933.62 mln (11 Analysts) |
Q2 Adjusted EPS | Beat | $1.88 | $1.84 (8 Analysts) |
Q2 EPS | $1.77 | ||
Q2 Net Income | $110.10 mln | ||
Q2 Adjusted EBITDA | Slight Beat* | $286.80 mln | $285.38 mln (11 Analysts) |
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the construction supplies & fixtures peer group is "buy"
Wall Street's median 12-month price target for Advanced Drainage Systems Inc is $178.00, about 23.6% above its November 4 closing price of $144.07
The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 21 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)