Company Reports

Hayward Holdings is a pure-play swimming pool equipment company manufacturing a broad range of pool equipment, including pumps, filters, heaters, LED lights, and sanitization, as well as pool automation solutions. The company benefits from a large installed base of equipment, and nearly 80% of its revenue comes from aftermarket service and replacement parts.

Narrow-moat-rated Hayward posted solid first-quarter results, as its adjusted EPS of $0.08 came in $0.01 above the FactSet consensus estimate. While nothing in the firm's earnings release materially alters our long-term outlook, we've slightly bumped our fair value estimate up to $15.30 from $15.20 per share due to the time value of money.

Narrow-moat-rated Hayward ended 2023 on a strong note, as its full-year net sales of $993 million and adjusted earnings per share of $0.56 both came in above our estimates of $973 million and $0.55, respectively. After rolling our model forward one year, we’ve raised our fair value estimate to $15.20 from $14.20, which reflects our slightly more optimistic operating margin assumptions as well as time value of money. The stock jumped by as much as 20% intraday on Feb. 29 following the strong earnings release, and we now see the name as fairly valued relative to our updated fair value estimate.

Hayward Holdings is a pure-play swimming pool equipment company manufacturing a broad range of pool equipment, including pumps, filters, heaters, LED lights, and sanitization, as well as pool automation solutions. The company benefits from a large installed base of equipment, and nearly 80% of its revenue comes from aftermarket service and replacement parts.

We’ve lowered our fair value estimate for narrow-moat-rated Hayward to $14.20 from $14.60 following the firm’s third-quarter earnings release. Management reduced its full-year 2023 outlook and now anticipates adjusted EBITDA of $245 million-$255 million (down from $265 million-$280 million previously), which assumes a 24%-26% net sales decline (down from a 20%-23% decline previously). The fair value reduction reflects our more muted near-term revenue growth projections, partially offset by time value of money.

Hayward Holdings is a pure-play swimming pool equipment company manufacturing a broad range of pool equipment, including pumps, filters, heaters, LED lights, and sanitization, as well as pool automation solutions. The company benefits from a large installed base of equipment, and nearly 80% of its revenue comes from aftermarket service and replacement parts.

We’ve raised our fair value estimate for narrow-moat-rated Hayward to $14.60 from $14 after the company reported solid second-quarter results, delivering record gross margins despite headwinds in the pool business. The fair value adjustment reflects our more optimistic midcycle operating margin assumptions as well as time value of money.

Hayward Holdings is a pure-play swimming pool equipment company manufacturing a broad range of pool equipment, including pumps, filters, heaters, LED lights, and sanitization, as well as pool automation solutions. The company benefits from a large installed base of equipment, and nearly 80% of its revenue comes from aftermarket service and replacement parts.

We are launching coverage of Hayward, a pure-play swimming pool equipment company, with a $14 fair value estimate, narrow moat rating, and Standard capital allocation rating.

Hayward Holdings is a pure-play swimming pool equipment company manufacturing a broad range of pool equipment, including pumps, filters, heaters, LED lights, and sanitization, as well as pool automation solutions. The company benefits from a large installed base of equipment, and nearly 80% of its revenue comes from aftermarket service and replacement parts.