Latham Group’s Resilience and Strategic Growth: A Buy Rating Amidst Market Challenges

William Blair analyst Ryan Merkel has maintained their bullish stance on SWIM stock, giving a Buy rating today.

Ryan Merkel has given his Buy rating due to a combination of factors that highlight Latham Group’s strong performance and potential for future growth. Despite challenges in the pool market, Latham has managed to maintain its guidance and deliver a solid second quarter, showcasing its resilience and strategic initiatives. The company’s ability to outperform in a sluggish market, particularly with the growth in fiberglass pools and expanding product lines like covers, positions it well for the upcoming pool closing season.
Moreover, Latham’s focus on lean manufacturing and value engineering has resulted in improved gross margins, which are expected to remain structurally higher. These efforts, combined with the company’s marketing and channel strategies, indicate a promising long-term opportunity. The positive momentum in sales, especially in covers and liners, and the increasing adoption of autocovers further support the Buy rating, as these factors suggest Latham is well-positioned to capitalize on future market growth.