Latham Group, Inc. (SWIM) stock analysis

P/E above its 5-year median

Latham's P/E of 105.1 is above its own 5-year median of 73.7.

P/E above the industry

Latham's P/E of 105.1 is above the Miscellaneous Plastics Products median of 30.9.

EV/EBITDA above its 5-year median

Latham's EV/EBITDA of 14.0 is above its 5-year median of 12.4.

P/B below the industry

Latham's price-to-book of 2.33 is below the Miscellaneous Plastics Products median of 3.56.

Trading above fair value

The share price of $8.41 is above our fair value estimate of $5.52.

Margin of safety under 20%

The price is 52.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -7.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 11.9% over the last twelve months; the Miscellaneous Plastics Products median is 9.2%.

Guidance raised

Latham raised its FY 2026 Adjusted EBITDA outlook on Aug 4, 2026.

Gross margin improving

Gross margin was 33.8% over the last twelve months, against 32.9% a year earlier.

Return on equity under 15%

Return on equity was 2.2% over the last twelve months and averaged -4.7% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.0%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Latham's return on equity of 2.2% is below the Miscellaneous Plastics Products median of 7.1%.

Earnings shrank over 5 years

Net income shrank 7.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 1.6% over the last twelve months, against a 5-year average of -2.5%.

Net margin below the industry

Latham's net margin of 1.6% is below the Miscellaneous Plastics Products median of 5.0%.

High debt

Debt is 68.9% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 78.7% five years ago to 68.9%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 26.6% of total debt.

Interest not well covered

Operating income covers interest expense 1.4 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.38 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.19; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Latham has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.