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Latham Group (SWIM)
NASDAQ:SWIM
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Latham Group
(NASDAQ:SWIM)
58Neutral
Positive Factors
Financial Performance
SWIM's 2025 adjusted EBITDA guidance is 8% above consensus, with a midpoint showing an 18% year-over-year increase.
Market Opportunities
SWIM is expected to outperform in the industry with increased fiberglass penetration in both non-sand and sand states.
Operational Efficiency
The EBITDA margin outlook was also a positive surprise with good leverage from volume growth and $9 million in cost savings from lean initiatives.
Negative Factors
Financial Guidance
2024 guidance narrowed, with implied Q4 below Street; might create some trading volatility.
Market Trends
There is a reiterated Underperform rating due to weakness in new pool construction trends.
Revenue Growth
Revenue growth is modeled at the low end of guidance due to risks associated with flat new construction and lower consumer sentiment.
Latham Group (SWIM) vs. S&P 500 (SPY)
Market Cap
$805.81M
Dividend YieldN/A
Average Volume (3M)755.95K
Price to Earnings (P/E)77.9
Beta (1Y)1.79
Revenue Growth-10.23%
EPS Growth-600.45%
CountryUS
Employees1,760
SectorIndustrials
Sector Strength67
IndustryConstruction
Share Statistics
EPS (TTM)-0.16
Shares Outstanding115,776,596
10 Day Avg. Volume616,051
30 Day Avg. Volume755,948
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.42
Price to Cash Flow (P/CF)29.20
P/FCF Ratio27.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.98Price Target Upside0.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Latham Group Business Overview & Revenue Model
Company DescriptionLatham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was incorporated in 2018 and is headquartered in Latham, New York.
How the Company Makes MoneyLatham Group generates revenue primarily through the sale of its swimming pool products, including fiberglass and vinyl liner pools, as well as pool covers and associated accessories. The company's revenue streams are supported by its extensive distribution network and relationships with dealers, builders, and retailers in the regions it operates. Latham Group's earnings are bolstered by its strong market presence and brand reputation, along with strategic partnerships with industry players to expand its product offerings and reach new customers. Additionally, the company benefits from a growing demand for residential swimming pools, driven by trends in home improvement and outdoor living.
Latham Group Financial Statement Overview
Summary
Latham Group is facing financial challenges with declining revenues and profitability, but it shows some operational improvements and maintains a stable financial position. The company needs to address its profit margins and continue focusing on debt reduction to enhance financial health.Income Statement
Latham Group's income statement reflects challenges with declining revenues and profitability. The company experienced a revenue decline over the past years, with a negative net income in recent periods, indicating profitability issues. However, there is a slight improvement in EBIT margin from 2023 to 2024, showing efforts in operational efficiency.52
Neutral
Balance Sheet
The balance sheet reveals a stable equity position with a favorable debt-to-equity ratio, thanks to a reduction in total debt over the years. This indicates financial discipline. However, the return on equity is negative due to net losses, which is a concern for potential investors.68
Positive
Cash Flow
Cash flow analysis shows positive operating cash flow, suggesting strong cash generation capabilities. Despite a decline in free cash flow in 2024 compared to 2023, the company maintains a decent free cash flow to net income ratio, which is critical for sustaining operations and investments.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 508.52M | 566.49M | 695.74M | 630.46M | 403.39M | Gross Profit |
| 153.74M | 152.94M | 216.47M | 204.16M | 142.77M | EBIT |
| 18.28M | 16.13M | 30.01M | -29.10M | 39.90M | EBITDA |
| 60.55M | 61.61M | 79.62M | 3.13M | 66.38M | Net Income Common Stockholders |
| -17.86M | -2.39M | -5.69M | -62.35M | 15.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 56.40M | 102.76M | 32.63M | 43.95M | 59.31M | Total Assets |
| 794.21M | 835.00M | 869.68M | 794.48M | 646.68M | Total Debt |
| 32.56M | 337.15M | 352.19M | 280.41M | 286.43M | Net Debt |
| -23.83M | 234.39M | 319.57M | 236.46M | 227.12M | Total Liabilities |
| 406.99M | 435.80M | 486.89M | 440.84M | 430.00M | Stockholders Equity |
| 387.22M | 399.20M | 382.79M | 353.64M | 216.67M |
| Cash Flow | Free Cash Flow | |||
| 41.19M | 83.18M | -7.38M | 8.71M | 46.90M | Operating Cash Flow |
| 61.31M | 116.37M | 32.31M | 33.69M | 63.16M | Investing Cash Flow |
| -84.64M | -31.73M | -45.02M | -108.20M | -115.81M | Financing Cash Flow |
| -22.02M | -13.88M | 3.77M | 60.02M | 54.30M |
Latham Group Technical Analysis
Positive
6.96
Price Trends
6.78
Positive
6.70
Positive
5.90
Positive
Market Momentum
0.03
Negative
54.27
Neutral
72.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWIM, the sentiment is Positive. The current price of 6.96 is above the 20-day moving average (MA) of 6.74, above the 50-day MA of 6.78, and above the 200-day MA of 5.90, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.27 is Neutral, neither overbought nor oversold. The STOCH value of 72.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWIM.
Latham Group Risk Analysis
Latham Group disclosed 1 risk factors in its most recent earnings report. Latham Group reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Latham Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $54.63B | 32.21 | 9.80% | 1.79% | -4.53% | -14.72% | |
74 Outperform | $10.92B | 799.85 | 1.20% | ― | 12.86% | -84.18% | |
65 Neutral | $3.11B | 26.59 | 8.68% | ― | 5.96% | 45.69% | |
63 Neutral | $12.25B | 28.81 | 33.41% | 1.44% | -4.16% | -15.44% | |
62 Neutral | $8.27B | 14.02 | 2.58% | 3.08% | 3.83% | -15.91% | |
60 Neutral | $14.93B | 18.75 | -118.61% | 1.68% | -1.74% | -6.91% | |
58 Neutral | $805.81M | 77.89 | -4.54% | ― | -10.23% | -600.45% |
* Industrials Sector Average
Performance Comparison
SWIM
Latham Group
6.99
3.03
76.52%
JCI
Johnson Controls
82.17
18.11
28.27%
MAS
Masco
70.46
-7.19
-9.26%
POOL
Pool
324.18
-73.89
-18.56%
PEN
Penumbra
269.62
46.44
20.81%
HAYW
Hayward Holdings
14.01
-1.30
-8.49%
Latham Group Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 27.47% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Latham Group's strong strategic positioning and operational improvements, particularly in the expansion of fiberglass pools and successful acquisitions. However, the call also acknowledged challenges such as decreased net sales, increased SG&A expenses, and a decline in the U.S. pool market. Despite these challenges, the company remains optimistic about future growth opportunities.Highlights
Increased Market Penetration of Fiberglass Pools
Fiberglass pools represented 24% of US pool starts in 2024, up from 23% in 2023. Fiberglass pools constituted 75% of Latham's in-ground pool sales, compared to 73% in 2023.
Adjusted EBITDA Growth
Adjusted EBITDA reached over $80 million, representing a margin of 15.8%, which is 30 basis points ahead of the previous year, despite lower sales volumes.
Successful Acquisition of CoverStar Central
The acquisition enabled vertical integration of the automatic safety cover line in 29 states, leading to revenue synergy opportunities and additional acquisitions.
Strong Financial Position
Ended 2024 with a strong financial position, providing flexibility for organic growth projects and potential acquisitions.
Growth Strategy in Sand States
Focused expansion in Florida, Texas, Arizona, and California, where fiberglass pool sales increased from 15% to 17% of total sales in these states.
Lean Manufacturing and Value Engineering Initiatives
Achieved $9 million in savings, enhancing production efficiencies and gross margin.
Lowlights
Decline in Net Sales
Net sales for the fourth quarter of 2024 were $87 million, a decrease of 4% from $91 million in Q4 2023, reflecting lower volumes due to industry softness.
Net Loss for the Year
Reported a net loss of $18 million for the full year, compared to a net income of $2 million in the prior year.
Increased SG&A Expenses
SG&A expenses rose to $108 million from $110 million in 2023, due to increased investments in sales, marketing, and higher performance-based compensation.
Challenges in U.S. Pool Market
Facing an estimated decline of approximately 15% in US pool starts in 2024, with trough market conditions expected to continue through much of 2025.
Company Guidance
During the Latham Group, Inc. earnings call, the company outlined its fiscal 2025 guidance, emphasizing key metrics and strategic initiatives. The company anticipates net sales to grow between 5% and 11% year-over-year, reaching between $535 million and $565 million, supported by market share gains primarily in the sand states of Florida, Texas, Arizona, and California. The adjusted EBITDA is projected to increase by 19% at the midpoint, ranging from $90 million to $100 million, with a margin expansion of 150 basis points. The guidance reflects the impact of recent acquisitions, CoverStar New York and Tennessee VARs, and ongoing efforts in lean manufacturing and value engineering, which contributed $9 million in savings in 2024. Latham plans to invest $27 million to $33 million in capital expenditures, including $10 million for developing molds for new fiberglass pool models tailored to sand states. The company also highlighted a 24% market penetration of fiberglass pools, with 75% of its in-ground pool sales in this category, and anticipates continued growth in automatic pool safety covers. Despite external challenges, including tariffs, the company is confident in its strategic direction and operational efficiencies to achieve its 2025 objectives.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.