Shares in Advanced Drainage Systems, Inc. are approaching an important resistance level. The stock's technical chart suggests that this pivot level will be broken.
Summary
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● The company has solid fundamentals for a short-term investment strategy.
Strengths
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● Thanks to a sound financial situation, the firm has significant leeway for investment.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
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● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
Weaknesses
● The firm trades with high earnings multiples: 27.52 times its 2022 earnings per share.
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● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
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● Financial statements have repeatedly disappointed market stakeholders. Most often, they were below expectations.
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Advanced Drainage Systems, Inc. is engaged in manufacturing water management solutions for the stormwater and onsite septic wastewater industries, which provides superior drainage solutions for use in the construction and agriculture marketplaces. The Company's segments include Pipe, International, Infiltrator and Allied Products & Other. Its Pipe segment manufactures and markets performance thermoplastic corrugated pipe throughout the United States. Its Infiltrator is engaged in providing plastic leach field chambers and systems, septic tanks and accessories, primarily for use in residential applications. International segment manufactures and markets products in regions outside of the United States, with owned facilities in Canada and those markets serviced through its joint ventures in Mexico and South America. The Companyâs Allied Products & Other segment offers adjacent technologies to its core Pipe offering, presenting a complete drainage solution for its clients and customers.