Lennox International Inc (LII) is slightly undervalued and Advanced Drainage Systems Inc (WMS) is overvalued.
Against our estimates of intrinsic value, LII trades at the wider discount: a margin of safety of +12%, against -30% for WMS.
Values as of the 19 Oct 2026 close.
Discounting its cash flows at 10.2% (average of 3 methods) values the shares at $404.07; the price of $355.78 is 12% below that value, and 72% of that value comes from beyond year five.
Leak Score 77/100 on 11 of 12 signals
Discounting its cash flows at 10.2% (average of 3 methods) values the shares at $98.51; the price of $127.78 is 30% above that value, and 72% of that value comes from beyond year five.
Leak Score 63/100 on 12 of 12 signals
| Metric | LII | WMS |
|---|---|---|
| Verdict | Slightly undervalued | Overvalued |
| Price | $355.78 | $127.78 |
| Intrinsic value | $404.07 | $98.51 |
| Margin of safety | +12% | -30% |
| Leak Score | 77/100 (11/12) | 63/100 (12/12) |
| Market cap | $12.3B | $9.6B |
| Revenue growth, 5 years | 7.4% | 9.0% |
| Operating margin | 19.7% | 21.5% |
| Net margin | 14.6% | 14.0% |
| Return on equity | 70.5% | 25.3% |
| Debt to equity | 1.56 | 0.95 |
| P/E | 16.1x | 22.1x |
| Forward P/E | 13.9x | 17.3x |
| P/B | 9.5x | 5.1x |
| Dividend yield | 1.4% | 0.6% |