Latham Group (SWIM) AI Stock Analysis

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Latham Group

(NASDAQ:SWIM)

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Neutral 60 (OpenAI - 5.2)

Rating:60Neutral

Price Target:

$7.00

▲(21.53% Upside)

Action:ReiteratedDate:03/06/26

The score is driven mainly by improving financial performance (better profitability, margins, cash flow, and lower leverage) and a constructive 2026 outlook from the earnings call. These positives are tempered by weak technical trend signals and a high P/E with no dividend yield support.

Positive Factors

Margin Expansion & EBITDA Improvement

Sustained margin improvement and a materially higher adjusted EBITDA imply stronger operating leverage from lean manufacturing and value-engineering. If management sustains these initiatives, the company can convert incremental sales into durable profit expansion and greater cash generation over multiple years.

Stronger Balance Sheet & Cash Generation

A markedly improved balance sheet and positive operating cash flow provide financial flexibility to fund strategic investments, absorb cyclical downturns, and de-risk the business. Lower leverage gives management room to execute acquisitions and capex without immediate solvency pressure.

Strategic M&A and Capacity Investments

An accretive acquisition plus ownership of key production sites strengthens supply, secular fiberglass positioning, and scale. These moves reduce outsourcing risk, improve gross margins long-term, and support controlled capacity expansion aligned with demand and product strategy.

Negative Factors

Cyclical & Regional Demand Weakness

The business is exposed to cyclical residential construction and regional concentration risks; sustained weakness or prolonged permit declines in key states like Texas can materially depress new pool starts and revenue, undermining medium-term growth assumptions.

Rising SG&A and Elevated CapEx

Higher recurring SG&A to drive adoption and substantially increased capex to buy/upgrade facilities will pressure near-term free cash flow and operating leverage. If demand softens, these fixed-cost and investment commitments could compress cash conversion and margin durability.

Choppy Revenue & Variable Cash Conversion

Historic inconsistencies in revenue growth and cash conversion signal execution and end-market sensitivity. Even with recent recovery, variable FCF and episodic losses raise the risk that profits and cash generation may revert in downturns, limiting predictability of long-term returns.

Latham Group (SWIM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$672.58M

Dividend YieldN/A

Average Volume (3M)618.71K

Price to Earnings (P/E)66.5

Beta (1Y)1.37

Revenue Growth4.12%

EPS Growth-198.38%

CountryUS

Employees1,800

SectorIndustrials

Sector Strength72

IndustryConstruction

Share Statistics

EPS (TTM)-0.03

Shares Outstanding116,766,930

10 Day Avg. Volume843,640

30 Day Avg. Volume618,711

Financial Highlights & Ratios

PEG Ratio-0.41

Price to Book (P/B)1.82

Price to Sales (P/S)1.35

P/FCF Ratio28.39

Enterprise Value/Market Cap1.37

Enterprise Value/Revenue1.69

Enterprise Value/Gross Profit6.04

Enterprise Value/Ebitda10.54

Forecast

1Y Price Target

$9.19

Price Target Upside59.55% Upside

Rating ConsensusHold

Number of Analyst Covering6

EPS Forecast (FY)0.16

Revenue Forecast (FY)$571.26M

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 fiberglass swimming pools and related accessories. The company employs a direct sales model as well as partnerships with a network of dealers and distributors, allowing it to reach a wide customer base. Key revenue streams include the sale of in-ground pools, maintenance products, and installation services. Additionally, Latham Group benefits from seasonal demand for swimming pools, which can lead to significant sales spikes during warmer months. Strategic partnerships with pool builders and landscape companies also contribute to its earnings, facilitating expanded market reach and enhanced customer service.

Latham Group Key Performance Indicators (KPIs)

Any

Revenue by Product Line

Revenue by Product Line
Shows how sales are split across Latham’s product lines (for example, pool shells, equipment, filtration systems, and renovation services). Reveals which businesses drive growth and profitability, highlights where margins are strongest, and signals how diversified the company’s revenue base is. A shift toward higher-margin lines or services can improve earnings, while heavy reliance on one product increases exposure to seasonality, housing-market swings, and supply-chain disruption.

Chart InsightsCovers and liners have recently outpaced in‑ground pools, shifting mix toward faster‑growing, higher‑margin accessories that helped drive the margin and EBITDA expansion management flagged; in‑ground pool sales are only modestly higher, so durable growth looks driven by cross‑sell, price actions and fiberglass share gains. The momentum reduces cyclicality risk, but ongoing tariff costs and softness in Texas/California are tangible near‑term headwinds—watch Q2–Q3 trends and margin cadence to confirm sustainable improvement.

Data provided by:

The Fly

Latham Group Earnings Call Summary

Earnings Call Date:Mar 03, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 12, 2026

Earnings Call Sentiment Positive

The call presented strong operational and financial momentum: revenue growth, substantial margin expansion, a meaningful increase in adjusted EBITDA, a return to full-year net income, strategic acquisitions (Freedom Pools) and balance sheet strength. Management outlined a clear growth plan for 2026 with targeted marketing and Sand States expansion. Key headwinds include a soft overall U.S. pool market, regional weakness (notably Texas), increased SG&A and CapEx as the company invests to capture future demand, and demand sensitivity to weather and macroeconomic factors. On balance, the positives—solid top-line and margin improvement, improved cash generation, accretive acquisitions and a confident FY2026 guide—outweigh the near-term challenges.

Q4-2025 Updates

Positive Updates

Quarterly Revenue Growth

Q4 net sales of $100.0M, up 15% year-over-year (organic growth 14%); all three product lines (In-Ground Pools, covers, liners) grew for the second consecutive quarter.

Full-Year Revenue and Organic Growth

FY2025 net sales of $546M, up 7% versus $509M in 2024, with organic growth of 5% driven by product-line execution and acquisitions.

Adjusted EBITDA and Margin Expansion

Q4 adjusted EBITDA of $10M (≈3x prior year) and adjusted EBITDA margin of 11% (up 630 bps y/y). FY2025 adjusted EBITDA of $100M, up $20M vs prior year, with adjusted EBITDA margin of 18.3% (up 250 bps).

Gross Margin Improvement

Gross margin expanded to 28% in Q4 (up 340 bps) and 33% for FY2025 (up 320 bps), driven by volume leverage, lean manufacturing and value-engineering initiatives, plus acquisition-related benefits.

Product Line Strength — Fiberglass Pools

Full-year In-Ground Pool sales of $262M, up 1% year-over-year despite a down industry; fiberglass represented 76.5% of In-Ground sales and grew ~2.5% year-over-year. Fiberglass penetration of U.S. pool starts estimated at ~24% in 2025 (≈+1 ppt).

Product Line Strength — Covers and Liners

Cover sales grew 22% in FY2025 to $161M (Q4 covers +19% to $37M); liner sales grew 4% in FY2025 to $123M (Q4 liners +2% to $13M). Autocover sales up 22% driven by consumer demand and marketing partnerships.

Cash Flow, Balance Sheet and Deleveraging

Year-end cash of $71M, net cash from operations of $51M for FY2025, total debt $280M and net debt leverage ratio of 2.1x at year-end with expectation to remain below 3x at end of Q1 and improve thereafter.

Strategic Acquisitions and Capacity Moves

Completed Freedom Pools acquisition (expected incremental ~$20M sales and ~$4M adjusted EBITDA annualized). Purchased four formerly-leased fiberglass production sites to secure strategic manufacturing footprint.

2026 Outlook and Guidance

Guidance for FY2026: $580M–$610M net sales and $105M–$120M adjusted EBITDA (midpoint growth of ~9% sales and ~12.7% EBITDA), planning mid-single-digit organic growth and increased targeted marketing investment.

Commercial Execution and Market Development

Notable progress in Sand States expansion (Sand States ≈17% of sales). Florida delivered double-digit growth and company highlighted dealer network expansion, master-planned community penetration, and new CEO-driven market development focus.

Negative Updates

Overall Market Weakness and Geographic Headwinds

U.S. In-Ground Pool market estimated down low- to mid-single digits in 2025 and expected roughly flat in 2026; Texas market weak with permits declining double-digits, which offset gains in other Sand States.

Q4 GAAP Loss Despite FY Profit

Q4 GAAP net loss of $7M ($0.06 per diluted share) though improved from prior-year Q4 loss of $29M; while FY net income was positive ($11M), the quarter-level GAAP loss highlights seasonality and timing variability.

Rising SG&A and Increased Investments

SG&A rose to $31M in Q4 (from $27M) and $123M for FY2025 (from $108M) as the company increases sales & marketing spend and personnel to accelerate fiberglass and autocover adoption, pressuring near-term operating leverage.

Higher CapEx and Integration Costs

FY2025 CapEx increased to $25M (vs $20M prior); FY2026 CapEx guide of $42M–$48M driven by facility purchases and upgrades (including Freedom integration) will pressure near-term free cash flow.

Demand Sensitivity to Weather and Macro

Q4 benefited from favorable weather and elongated selling season; management noted weather variability and consumer factors (interest rates, confidence) as key risks that can delay purchases and mute near-term demand.

Regional Execution Challenges

Sand States sales mix remained ~17% (flat year-over-year) despite ambitions to accelerate conversion — growth concentrated in Florida and Arizona while Texas continued to lag, indicating uneven regional traction.

Company Guidance

Latham guided 2026 net sales of $580–$610 million and adjusted EBITDA of $105–$120 million (midpoint growth vs. 2025 of ~9% sales and ~12.7% EBITDA), which management says incorporates mid‑single‑digit organic growth (the organic portion cited ~6% at midpoint) plus the recently completed Freedom Pools acquisition (expected to add ≈$20 million of net sales and ≈$4 million of adjusted EBITDA annualized); capital expenditures are projected at $42–48 million (vs. $25 million in 2025) to fund facility purchases and upgrades; management expects U.S. in‑ground pool starts roughly in line with 2025, aims to further improve gross margins toward a 35% target, and anticipates net debt leverage to remain below 3x at the end of Q1 and improve thereafter (year‑end 2025 cash was $71 million, total debt $280 million, net leverage 2.1x).

Latham Group Financial Statement Overview

Summary

Financials show a clear 2025 improvement: profitability turned positive, margins strengthened, leverage dropped materially, and operating/free cash flow stayed positive. Offsetting this are a choppy multi-year revenue trend, thin net margins, and historically inconsistent profitability and cash conversion, which raise questions about durability.

Income Statement

Neutral

Profitability has improved meaningfully in the most recent year (2025) with net income turning positive and gross margin expanding versus 2023–2024. However, the multi-year revenue trajectory is choppy (declines in 2023–2024 followed by modest growth in 2025), and net margins remain thin in 2025 despite the recovery.

Balance Sheet

Positive

The balance sheet strengthened sharply in 2025, with very low leverage and a much lower debt-to-equity level versus 2022–2024. Equity remains sizeable relative to assets, which improves financial flexibility. The key weakness is that returns on equity have been inconsistent over time and only modestly positive in 2025 after several loss years.

Cash Flow

Positive

Cash generation is solid with positive operating cash flow and free cash flow in 2025, and free cash flow growth improved year over year. That said, cash-flow conversion is not consistently strong across the period (including negative free cash flow in 2022), and free cash flow is only moderate relative to reported earnings in 2025, pointing to some variability in cash efficiency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	545.91M	508.52M	566.49M	695.74M	630.46M
Gross Profit	153.14M	153.74M	152.94M	216.47M	204.16M
EBITDA	83.24M	60.55M	61.61M	79.62M	3.13M
Net Income	11.12M	-17.86M	-2.39M	-5.69M	-62.35M
Balance Sheet
Total Assets	823.22M	794.21M	835.00M	869.68M	794.48M
Cash, Cash Equivalents and Short-Term Investments	71.04M	56.40M	102.76M	32.63M	43.95M
Total Debt	34.84M	310.83M	333.12M	352.19M	280.41M
Total Liabilities	417.36M	406.99M	435.80M	486.89M	440.84M
Stockholders Equity	405.86M	387.22M	399.20M	382.79M	353.64M
Cash Flow
Free Cash Flow	26.05M	41.19M	83.18M	-7.38M	8.71M
Operating Cash Flow	51.43M	61.31M	116.37M	32.31M	33.69M
Investing Cash Flow	-30.32M	-84.64M	-31.73M	-45.02M	-108.20M
Financing Cash Flow	-6.97M	-22.02M	-13.88M	3.77M	60.02M

Latham Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.76

Price Trends

50DMA

6.53

Negative

100DMA

6.67

Negative

200DMA

6.89

Negative

Market Momentum

MACD

-0.17

Positive

RSI

36.23

Neutral

STOCH

8.38

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWIM, the sentiment is Negative. The current price of 5.76 is below the 20-day moving average (MA) of 6.51, below the 50-day MA of 6.53, and below the 200-day MA of 6.89, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 36.23 is Neutral, neither overbought nor oversold. The STOCH value of 8.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWIM.

Latham Group Risk Analysis

Latham Group disclosed 35 risk factors in its most recent earnings report. Latham Group reported the most risks in the "Finance & Corporate" 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
JBI	62 Neutral	$758.17M	17.16	9.76%	―	-10.84%	-53.49%
SWIM	60 Neutral	$672.58M	66.46	-2.68%	―	4.12%	-198.38%
APOG	59 Neutral	$708.76M	11.74	8.07%	2.77%	1.19%	-56.98%
ROCK	54 Neutral	$1.18B	15.14	9.87%	―	-9.21%	-97.43%
NX	52 Neutral	$784.55M	-52.26	-30.23%	2.12%	43.81%	-584.11%
BXC	49 Neutral	$374.78M	2,188.09	2.20%	―	-0.19%	-50.51%

* Industrials Sector Average

Performance Comparison

SWIM

Latham Group

5.76

-0.52

-8.28%

APOG

Apogee

32.95

-12.91

-28.16%

BXC

Bluelinx Holdings

47.64

-34.78

-42.20%

ROCK

Gibraltar Industries

39.83

-24.31

-37.91%

Quanex

17.08

-2.71

-13.69%

JBI

Janus International Group

5.46

-2.61

-32.34%

Latham Group Corporate Events

Business Operations and StrategyExecutive/Board Changes

Latham Group Announces Leadership Transition

Neutral

Dec 8, 2025

Latham Group announced a leadership transition with Scott Rajeski retiring as President and CEO, effective January 4, 2026, and Sean Gadd taking over the role on January 5, 2026. Mr. Gadd, with extensive experience from James Hardie Building Products, is expected to drive strategic growth for Latham, while Rajeski will assist in the transition as a special advisor for six months.

The most recent analyst rating on (SWIM) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Latham Group stock, see the SWIM Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Mar 06, 2026