Latham Group (SWIM) AI Stock Analysis

• Market Cap: $877.56M
• Dividend Yield: N/A
• Average Volume (3M): 599.26K
• Price to Earnings (P/E): 77.9
• Beta (1Y): 1.53
• Revenue Growth: -0.11%
• EPS Growth: -213.56%
• Country: US
• Employees: 1,800
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 0.11
• Shares Outstanding: 116,542,060
• 10 Day Avg. Volume: 616,629
• 30 Day Avg. Volume: 599,260
• PEG Ratio: -0.07
• Price to Book (P/B): 2.07
• Price to Sales (P/S): 1.58
• P/FCF Ratio: 19.50
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 2.05
• Enterprise Value/Gross Profit: 6.70
• Enterprise Value/Ebitda: 14.88
• 1Y Price Target: $6.50
• Price Target Upside: -12.16% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 54 Neutral
• Price Target: $7.50 ▲(1.35% Upside)

Latham Group's overall stock score is primarily impacted by its financial performance challenges, including negative net income and cash flow issues. While the earnings call provided positive growth insights, technical indicators and valuation remain weak, contributing to a moderate overall score.

Positive Factors

Revenue and EBITDA Growth

The company's strong revenue and EBITDA growth indicate effective market strategies and operational efficiencies, supporting long-term financial health.

Market Expansion

Expanding into key markets like Florida and Texas enhances Latham's market position, driving future growth and increasing competitive advantage.

Gross Margin Improvement

Improved gross margins reflect enhanced operational efficiency and cost management, contributing to better profitability and financial resilience.

Negative Factors

Negative Cash Flow

Negative cash flow growth suggests challenges in sustaining operations and funding growth, potentially impacting long-term financial stability.

Profitability Challenges

Persistent profitability issues highlight the need for strategic improvements to enhance earnings and shareholder value over time.

Adverse Weather Impact

Weather-related disruptions can affect sales and operational timelines, posing risks to revenue consistency and market performance.

Latham Group Business Overview & Revenue Model

Company Description

Latham 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 Money

Latham 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 Financial Statement Overview

Summary

Latham Group shows mixed financial health. While it has effective cost management and strong cash flow, persistent net losses and declining revenue growth are concerning. The balance sheet is stable with low leverage, but profitability issues affect return measures.

Income Statement

Latham Group's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 29.37%, indicating decent cost management. However, the company is facing challenges with profitability, evident from the negative net profit margin of -3.13% and recurring net losses. Revenue growth has been negative over the past three years, highlighting a declining trend in sales. The EBIT and EBITDA margins are modest at 3.11% and 9.40% respectively, indicating limited operational efficiency. Overall, while the company manages costs effectively, the declining revenue and net losses are concerning.

Balance Sheet

The balance sheet suggests reasonable stability. The debt-to-equity ratio stands at 0.08 in the TTM, reflecting a low level of leverage which is a strength. However, the return on equity is negative due to net losses, which is a downside. The equity ratio is approximately 46.24%, indicating a solid equity base relative to total assets. Overall, the company's low leverage is a positive aspect, but profitability issues affect the overall assessment.

Cash Flow

Cash flow analysis reveals a robust free cash flow generation with a positive free cash flow in the TTM. The free cash flow to net income ratio is negative due to net losses, but the operating cash flow to net income ratio is notably high at approximately 3.07, demonstrating strong operational cash generation. The free cash flow growth rate has been volatile, with recent declines due to negative trends in revenue and earnings. Despite the challenges, the company shows a healthy cash flow position, providing some resilience against financial pressures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	521.83M	508.52M	566.49M	695.74M	630.46M	403.39M
Gross Profit	159.68M	153.74M	152.94M	216.47M	204.16M	142.77M
EBITDA	71.88M	60.55M	61.61M	79.62M	3.13M	66.38M
Net Income	-13.26M	-17.86M	-2.39M	-5.69M	-62.35M	15.98M
Balance Sheet
Total Assets	822.14M	794.21M	835.00M	869.68M	794.48M	646.68M
Cash, Cash Equivalents and Short-Term Investments	26.94M	56.40M	102.76M	32.63M	43.95M	59.31M
Total Debt	311.28M	310.83M	337.15M	352.19M	280.41M	221.50M
Total Liabilities	423.71M	406.99M	435.80M	486.89M	440.84M	430.00M
Stockholders Equity	398.43M	387.22M	399.20M	382.79M	353.64M	281.61M
Cash Flow
Free Cash Flow	11.86M	41.19M	83.18M	-7.38M	8.71M	46.90M
Operating Cash Flow	32.49M	61.31M	116.37M	32.31M	33.69M	63.16M
Investing Cash Flow	-90.09M	-84.64M	-31.73M	-45.02M	-108.20M	-115.81M
Financing Cash Flow	-5.60M	-22.02M	-13.88M	3.77M	60.02M	54.30M

Latham Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.40
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 7.4 is below the 20-day moving average (MA) of 7.69, below the 50-day MA of 7.60, and above the 200-day MA of 6.68, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 42.66 is Neutral, neither overbought nor oversold. The STOCH value of 32.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWIM.

Latham Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROCK	74 Outperform	$1.96B	15.64	12.23%	―	-7.49%	10.79%
APOG	72 Outperform	$953.76M	18.91	10.66%	2.32%	-0.77%	-52.02%
JBI	66 Neutral	$1.39B	32.43	8.02%	―	-14.06%	-65.38%
BXC	63 Neutral	$580.09M	21.42	4.57%	―	-2.32%	-21.44%
SWIM	54 Neutral	$877.56M	77.89	-3.29%	―	-0.11%	-213.56%
NX	49 Neutral	$676.68M	-2.37	-39.63%	2.17%	70.18%	-374.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Latham Group Corporate Events

Latham Group Appoints Jeffrey T. Jackson as Director

On August 1, 2025, Latham Group‘s Board of Directors appointed Jeffrey T. Jackson as a new independent director and member of the Audit Committee, effective August 5, 2025. Jackson, with a background in executive roles at various companies, brings expertise as an ‘audit committee financial expert’ under SEC rules. Concurrently, Latham Group announced its strong financial performance for the second quarter of 2025, with net sales of $172.6 million, a 7.8% increase from the previous year. The company achieved a gross margin expansion to 37.1% and an adjusted EBITDA margin of 23.1%, driven by higher volumes, lean manufacturing, and acquisitions. The results highlight Latham’s market leadership and strategic growth initiatives, particularly in fiberglass pools and autocovers.