Latham Group (SWIM) AI Stock Analysis

• Market Cap: $876.40M
• Dividend Yield: N/A
• Average Volume (3M): 588.04K
• Price to Earnings (P/E): 77.9
• Beta (1Y): 1.50
• 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: 615,222
• 30 Day Avg. Volume: 588,036
• 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: 2.10
• Enterprise Value/Gross Profit: 7.15
• Enterprise Value/Ebitda: 17.39
• 1Y Price Target: $6.83
• Price Target Upside: -9.18% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 72 Outperform
• Price Target: $8.50 ▲(13.03% Upside)

Latham Group's overall score is driven by strong technical analysis and positive earnings call sentiment, which highlight growth and market expansion. However, the score is tempered by valuation concerns due to negative earnings and lack of dividend yield. Financial performance is stable but needs improvement in profitability and revenue growth.

Positive Factors

Revenue Growth

The consistent revenue and EBITDA growth indicate strong market demand and effective business strategies, supporting long-term expansion.

Market Expansion

Strategic expansion into high-growth markets like Florida and Texas enhances Latham's competitive position and potential for sustained growth.

Leadership Strength

The addition of a seasoned director with financial expertise strengthens governance and strategic oversight, aiding long-term decision-making.

Negative Factors

Declining Revenue Trend

Persistent negative revenue growth over recent years suggests challenges in market demand or competitive pressures, impacting long-term prospects.

Profitability Challenges

Ongoing profitability issues, reflected in negative margins, could hinder reinvestment capacity and long-term financial health.

Industry Challenges

A declining market for pool starts indicates broader industry challenges, potentially limiting growth opportunities in the near term.

Latham Group Business Overview & Revenue Model

Company Description

Latham Group, Inc. (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 pool covers. With a focus on innovative design and high-quality materials, Latham Group aims to provide homeowners with durable and aesthetically pleasing pool options that enhance their outdoor living experiences.

How the Company Makes Money

Latham Group generates revenue primarily through the sale of its in-ground swimming pool products and related accessories. The company's key revenue streams include fiberglass pools, vinyl liner pools, and automatic safety covers, which are sold directly to consumers as well as through a network of dealers and distributors. The company benefits from strategic partnerships with its distribution network, enabling it to expand its market reach and customer base. Latham Group's revenue is also influenced by seasonal demand, with higher sales typically occurring during warmer months when consumer interest in pool installations peaks.

Latham Group Financial Statement Overview

Summary

Latham Group shows mixed financial health. While cost management and cash flow are strong, persistent net losses and declining revenue growth are concerning. The balance sheet is stable with low leverage, but profitability issues impact 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	509.31M	508.52M	566.49M	695.74M	630.46M	403.39M
Gross Profit	149.61M	153.74M	152.94M	216.47M	204.16M	142.77M
EBITDA	61.52M	60.55M	61.61M	79.62M	3.13M	66.38M
Net Income	-15.96M	-17.86M	-2.39M	-5.69M	-62.35M	15.98M
Balance Sheet
Total Assets	824.59M	794.21M	835.00M	869.68M	794.48M	646.68M
Cash, Cash Equivalents and Short-Term Investments	23.97M	56.40M	102.76M	32.63M	43.95M	59.31M
Total Debt	334.96M	310.83M	337.15M	352.19M	280.41M	286.43M
Total Liabilities	443.44M	406.99M	435.80M	486.89M	440.84M	430.00M
Stockholders Equity	381.14M	387.22M	399.20M	382.79M	353.64M	216.67M
Cash Flow
Free Cash Flow	30.71M	41.19M	83.18M	-7.38M	8.71M	46.90M
Operating Cash Flow	48.94M	61.31M	116.37M	32.31M	33.69M	63.16M
Investing Cash Flow	-87.68M	-84.64M	-31.73M	-45.02M	-108.20M	-115.81M
Financing Cash Flow	19.47M	-22.02M	-13.88M	3.77M	60.02M	54.30M

Latham Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWIM, the sentiment is Neutral. The current price of 7.52 is below the 20-day moving average (MA) of 7.81, below the 50-day MA of 7.53, and above the 200-day MA of 6.68, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 44.10 is Neutral, neither overbought nor oversold. The STOCH value of 16.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWIM.

Latham Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWIM	72 Outperform	$876.40M	77.89	-3.29%	―	-0.11%	-213.56%
JBI	66 Neutral	$1.39B	32.46	8.02%	―	-14.06%	-65.38%
BXC	63 Neutral	$584.67M	21.91	4.57%	―	-2.32%	-21.44%
NX	49 Neutral	$633.10M	-2.22	-39.63%	2.32%	70.18%	-374.22%
JELD	46 Neutral	$432.99M	-1.22	-74.46%	―	-15.16%	-1232.39%
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.