Advanced Drainage Systems' (WMS) fiscal 2030 outlook for organic growth and EBITDA margins represents a "compelling combination" for long-term shareholders, RBC Capital Markets said in a Sunday note.

The company targets an organic growth compound annual growth rate of 8% and EBITDA margins above 30% by fiscal 2030, according to the note.

Advanced Drainage Systems also projected at least 70% operating cash flow to EBITDA and outlined $5 billion of deployable capital for mergers and acquisitions, capital spending, share buybacks and dividends, RBC added.

Advanced Drainage Systems' total growth outlook could have "meaningful" upside if the company executes on its $5 billion capital deployment capacity, the brokerage said, noting that the outlook reflects the deployment of only about $2 billion of this capacity toward acquisitions.

RBC maintained its outperform rating on Advanced Drainage Systems, with a $170 price target.

Price: 142.95, Change: -4.17, Percent Change: -2.83