Latham Group (SWIM) AI Stock Analysis

• Market Cap: $673.77M
• Dividend Yield: N/A
• Average Volume (3M): 501.15K
• Price to Earnings (P/E): 77.9
• Beta (1Y): 1.62
• Revenue Growth: -5.58%
• EPS Growth: -465.52%
• Country: US
• Employees: 1,800
• Sector: Industrials
• Sector Strength: 85
• Industry: Construction
• EPS (TTM): -0.05
• Shares Outstanding: 116,367,610
• 10 Day Avg. Volume: 443,767
• 30 Day Avg. Volume: 501,150
• PEG Ratio: 0.71
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -49.44
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 4.57
• Enterprise Value/Ebitda: 2.71
• 1Y Price Target: $6.25
• Price Target Upside: 7.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 60 Neutral
• Price Target: $6.00 ▲(3.63%Upside)

The overall stock score of 60 reflects mixed financial performance and weak technical indicators, offset by promising strategic expansion and product growth highlighted in the earnings call. Valuation concerns due to negative P/E and lack of dividends further weigh on the score.

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.

Market 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 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 with effective cost management and a strong cash flow position. The company faces challenges with profitability due to persistent net losses and declining revenue growth. 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
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
	EBIT
15.84M	18.28M	16.13M	30.01M	-29.10M	39.90M
	EBITDA
47.86M	60.55M	61.61M	79.62M	3.13M	66.38M
	Net Income Common Stockholders
-15.96M	-17.86M	-2.39M	-5.69M	-62.35M	15.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
23.97M	56.40M	102.76M	32.63M	43.95M	59.31M
	Total Assets
824.59M	794.21M	835.00M	869.68M	794.48M	646.68M
	Total Debt
31.30M	310.83M	337.15M	352.19M	280.41M	286.43M
	Net Debt
7.33M	254.44M	234.39M	319.57M	236.46M	227.12M
	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: Negative
• Last Price: 5.79
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 5.79 is below the 20-day moving average (MA) of 5.92, above the 50-day MA of 5.71, and below the 200-day MA of 6.40, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.72 is Neutral, neither overbought nor oversold. The STOCH value of 58.21 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
AZEK	77 Outperform	$7.62B	51.33	10.62%	―	5.93%	3.50%
JBI	69 Neutral	$1.14B	23.21	9.51%	―	-13.95%	-63.37%
BXC	68 Neutral	$534.28M	14.83	5.96%	―	-4.22%	-16.01%
NX	66 Neutral	$887.74M	32.52	2.18%	1.66%	47.66%	-75.65%
Sector *	66 Neutral	$4.50B	12.26	5.40%	3.65%	4.17%	-12.02%
SWIM	60 Neutral	$673.77M	77.89	-4.13%	―	-5.58%	-465.52%
JELD	46 Neutral	$307.08M	―	-55.39%	―	-14.12%	-1264.86%

Latham Group Corporate Events

Latham Group Announces CCO Resignation Effective May 16

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.