Cautious Outlook on Latham Group Amid Rising Costs and Industry Challenges

In a report released yesterday, Shaun Calnan from Bank of America Securities reiterated a Sell rating on Latham Group (SWIM – Research Report), with a price target of $5.40.

Shaun Calnan’s rating is based on several key considerations regarding Latham Group’s financial outlook and market conditions. Despite the company’s 2025 adjusted EBITDA guidance being above consensus, Calnan notes that the expected growth is tempered by increased SG&A expenses, which led to a reduction in the 2025 and 2026 EBITDA estimates. Additionally, the company’s revenue forecast is at the lower end of guidance due to potential risks in new pool construction, influenced by declining consumer sentiment and a decrease in permits.
Furthermore, while there is potential for EBITDA margin expansion driven by gross margin improvements, these gains are partially offset by higher SG&A costs and potential risks from tariffs on Mexico and Canada. Although there are growth opportunities in sand states, such as increased fiberglass pool penetration, these are still in the early stages and may not immediately offset the broader industry challenges. Consequently, Calnan maintains a cautious outlook, reflected in the Sell rating.

According to TipRanks, Calnan is ranked #8861 out of 9384 analysts.