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Latham Group (SWIM)
NASDAQ:SWIM
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Latham Group
(NASDAQ:SWIM)
67Neutral
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 Expansion
SWIM is expected to outperform in the industry with increased fiberglass penetration in both non-sand and sand states.
Operational Efficiency
Lean manufacturing and value engineering continue to drive better gross margin.
Negative Factors
Construction Trends
There is a reiterated Underperform rating due to weakness in new pool construction trends.
Guidance Volatility
2024 guidance narrowed, with implied Q4 below Street; might create some trading volatility.
Revenue Growth Risks
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
$723.81M
Dividend YieldN/A
Average Volume (3M)755.69K
Price to Earnings (P/E)77.9
Beta (1Y)1.61
Revenue Growth-5.58%
EPS Growth-465.52%
CountryUS
Employees1,800
SectorIndustrials
Sector Strength91
IndustryConstruction
Share Statistics
EPS (TTM)-0.05
Shares Outstanding116,367,610
10 Day Avg. Volume695,648
30 Day Avg. Volume755,691
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)1.92
Price to Sales (P/S)0.00
P/FCF Ratio18.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.81Price Target Upside9.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Latham Group Business Overview & Revenue Model
Company DescriptionLatham Group (SWIM) is a leading designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. The company specializes in fiberglass pools, vinyl liner pools, and covers, offering a wide range of products that cater to various customer preferences and needs. Latham Group is known for its innovation and high-quality products, serving both homeowners and pool professionals.
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 faces financial challenges with declining revenues and profitability, indicated by a negative net income. However, the company shows some operational improvements, such as an improved EBIT margin and a stable financial position, thanks to a favorable debt-to-equity ratio and positive operating cash flow.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
6.22
Price Trends
6.05
Positive
6.39
Negative
6.33
Negative
Market Momentum
0.13
Negative
54.82
Neutral
51.60
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 6.22 is above the 20-day moving average (MA) of 5.81, above the 50-day MA of 6.05, and below the 200-day MA of 6.33, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 54.82 is Neutral, neither overbought nor oversold. The STOCH value of 51.60 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.37B | 49.66 | 10.62% | ― | 5.93% | 3.50% | |
70 Outperform | $1.24B | 25.36 | 9.51% | ― | -13.95% | -63.37% | |
69 Neutral | $887.93M | 30.44 | 1.56% | 1.70% | 29.87% | -76.37% | |
68 Neutral | $569.34M | 15.80 | 5.96% | ― | -4.22% | -16.01% | |
67 Neutral | $723.81M | 77.89 | -4.13% | ― | -5.58% | -465.52% | |
64 Neutral | $4.43B | 12.01 | 5.16% | 249.23% | 4.03% | -11.73% | |
45 Neutral | $343.75M | ― | -55.39% | ― | -14.12% | -1264.86% |
* Industrials Sector Average
Performance Comparison
SWIM
Latham Group
6.22
2.27
57.47%
BXC
Bluelinx Holdings
69.92
-31.68
-31.18%
NX
Quanex
18.80
-13.54
-41.87%
JELD
JELD-WEN
4.03
-11.53
-74.10%
JBI
Janus International Group
8.86
-5.56
-38.56%
AZEK
AZEK Company
51.24
4.99
10.79%
Latham Group Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 4.19%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in specific product categories such as fiberglass and auto covers, a successful expansion strategy in the Sand States, and a positive financial position with improved gross margins. However, there were declines in in-ground pool and liner sales, and a decrease in adjusted EBITDA due to increased marketing expenses. Tariff-related risks were also noted. Overall, the positive developments balanced the challenges, creating a neutral sentiment.Q1-2025 Updates
Positive Updates
Fiberglass and Auto Cover Product Strength
Latham Group saw relative strength in its fiberglass and auto cover product categories, contributing positively to the quarter's results.
Sand States Expansion Strategy
Significant progress was made on the Sand States expansion strategy, representing a major growth opportunity, particularly in Florida, Texas, Arizona, and California.
Gross Margin Expansion
Latham delivered a 190 basis point expansion in gross margin, attributed to lean manufacturing and value engineering initiatives.
Auto Covers Sales Growth
Auto covers sales increased by 18%, supported by organic growth and benefits from acquisitions.
Strong Brand Visibility and Engagement
Latham led the industry in brand visibility and engagement, being the most searched brand online among major fiberglass manufacturers.
Positive Financial Position
Ended the first quarter with a cash position of $24 million and a plan to fully repay the revolver by the end of the second quarter.
Negative Updates
In-Ground Pool Sales Decline
In-ground pool sales were down 4% from Q1 2024, impacted by soft industry conditions and adverse weather.
Liner Sales Decline
Liner sales declined by 8% compared to the first quarter of 2024.
Adjusted EBITDA Decrease
Adjusted EBITDA decreased by $1 million from the prior year period, primarily due to higher sales and marketing spend.
Risks from Tariffs
Tariffs posed a potential headwind, estimated at 350 to 400 basis points of impact pre-mitigation.
Company Guidance
During the Latham Group Inc.'s first quarter 2025 earnings call, the company provided several key metrics and guidance for the year. The company reported net sales of $111.4 million, a 0.7% increase from Q1 2024, and a gross margin expansion of 190 basis points to approximately 30%. The sales growth was driven by a surge in fiberglass pools and auto cover products, with cover sales increasing by 18%, supported by both organic growth and recent acquisitions. Despite a net loss of $6 million, the company saw a narrowed loss compared to the previous year. Latham maintained its revenue growth expectations at 8% for 2025, comprised of 5% organic growth and 3% from acquisitions. They also projected a 19% growth in adjusted EBITDA, reflecting significant operating leverage. The company highlighted its Sand States expansion strategy and anticipated positive impacts from its marketing efforts, including partnerships and new product models. Additionally, Latham emphasized its ability to manage tariff impacts through strategic pre-purchasing and price increases to protect margins.Latham Group Corporate Events
Executive/Board ChangesShareholder Meetings
Latham Group Announces CCO Resignation Effective May 16
Neutral
May 6, 2025
On May 1, 2025, Latham Group announced that its Chief Commercial Officer, Joshua D. Cowley, will resign effective May 16, 2025, to pursue another opportunity. During the same day, at the company’s annual meeting, stockholders elected three Class I directors to serve until 2028 and ratified Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
Spark’s Take on SWIM Stock
According to Spark, TipRanks’ AI Analyst, SWIM is a Neutral.
Latham Group’s overall stock score is influenced by financial challenges, evident in its declining revenues and profitability, despite operational improvements and a stable financial position. The bearish technical indicators and challenging valuation further weigh on the score. However, the positive outlook from the earnings call reflects strategic growth opportunities and operational efficiencies, providing some optimism despite current market conditions.
To see Spark’s full report on SWIM stock, click here.
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.