ADVANCED DRAINAGE SYSTEMS, INC.

Advanced Drainage Systems has been selling the same argument since 1966: pipe made of plastic beats pipe made of concrete. The company's history pages and its 2014 listing-era filings trace the business back to that founding year in Ohio, and the pitch hasn't changed much since — corrugated high-density polyethylene pipe is lighter than concrete, cheaper to haul and install, and doesn't corrode in the ground. In its fiscal 2019 Form 10-K, ADS called itself the leading manufacturer of high-performance thermoplastic corrugated pipe and said its largest HDPE-pipe competitor had nine plants in the United States and Canada and estimated annual sales of about $140 million — roughly one-tenth of ADS's fiscal 2019 net sales. That is the filing's evidence for market position, without upgrading “leading” into “largest.” Water still runs downhill. Somebody has to carry it.

The filed financial history this registry tracks picks up the story just before the company went public. ADS priced its NYSE listing in July 2014, per the company's offering announcements from that month, after nearly five decades as a private and employee-owned business. The fundamentals series on this page normalizes its SEC filings without interpolation — where a filing doesn't disclose an input, the gap is left as a gap.

The one big swerve in that record came in 2019. ADS completed its acquisition of Infiltrator Water Technologies — septic chambers and onsite wastewater, sold largely into residential construction — in a roughly $1.08 billion deal announced closed on July 31, 2019, per the company's announcement and its Form 8-K press-release exhibit. That purchase did two things to the filed numbers. It pushed ADS deeper into recycled plastic as a raw material, and it tied a company already exposed to non-residential construction more tightly to housing starts. Both exposures show up later. Keep reading.

Here's where the cycle talks. Pricing power is the weakest of the five filters, at 31 out of 100, and the registry's own reading is: Median gross margin 31.9% over 10y, variable. That's what selling into construction looks like: resin costs move, housing starts move, and a pipe maker's margin moves with them.

What didn't wobble is the return on the capital. Returns on capital scores 75 — Median ROIC 15.9%, above the 12% hurdle in 80% of years. Balance-sheet safety scores 77: Net debt/EBITDA 1.7x, no material interest expense disclosed. Capital allocation scores 60 (Owner earnings +19.2%/yr, share count growing (dilution).), and revenue and EPS trend scores 70. Sum it per the methodology and WMS lands at 62.7 out of 100. Narrow moat, says the registry.

Then the price. The registry's zero-growth baseline works out to $68.85 per share, against a recent price of $125.19. The page presents the achieved owner-earnings trend and the growth the price implies side by side without resolving them, and notes that the zero-growth estimate assumes trailing owner earnings persist — an assumption a cyclical business tests harder than most.

The neighborhood fits the score. The registry ranks WMS #43 of 310 scored Materials companies. Aggregates and cement companies, mostly. Concrete, in other words. The company that spent sixty years arguing against concrete now scores alongside the people who pour it, and on this index the plastic-pipe maker and the rock quarries come out about even: narrow moats, cyclical margins, real returns on capital.

Sixty years in, the argument holds a familiar shape. The shift from concrete to plastic keeps the revenue line climbing through cycles, but it hasn't bought pricing power, and the 31 on that filter is the honest cost of selling a commodity input into a cyclical end market. The returns and the balance sheet are what a patient owner actually keeps. The score history on this page is young and append-only. The record will lengthen. The cycle will turn again.