Latham Group Inc. (SWIM) - Due Diligence

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66OpportunityDD: Sep 14, 2026Analyst: 71

paidPrice at analysis date

USD 6.34 (14/09/2026)

domainMkt cap

$745.9M

pie_chartShares

117.65M

candlestick_chart52W

trending_downShort interest

3.3%

INFONASDAQBuilding Products1900 employeesFounded 2018

Verdict: Favorable Risk/Reward

Fiberglass share gainer executing beat & raise into a weak pool cycle; asymmetry passes gate (+97% bull vs −37% bear) but leverage (3.2x Debt/EBITDA, interest coverage 1.5x, Altman Z 1.92) caps position sizing.

📊 DIANALITICS RESEARCH INDEX Company & Thesis Assessment

Latham Group, Inc. — SWIM

In-ground fiberglass pools · Small cap $746M · TTM Revenue $577M

Score /100 — updated 2026-09-14 · Green band (70–100)

Fin. strength

/20 pts

EBITDA/FCF

/15 pts

Debt/leverage

/15 pts

Stage/business

/15 pts

Catalysts

/10 pts

Reg. risk

/8 pts

Risk/reward

/7 pts

Management

/5 pts

Sector/macro

/3 pts

Compliance

/2 pts

Fallen angel/inflection Fiberglass share gainer Beat & raise Levered small cap

💰 Fair Value — sum-of-parts EV/EBITDA + peer-adjusted multiples

Fair value base case

USD 8.80

Range: USD 4.00-USD 12.5

Price at analysis date: USD 6.34 (14/09/2026)

Base upside/downside: +39%

SWIM trades at ~11.6x EV/EBITDA fwd vs peer median ~13.0x — a 10–15% discount justified only in part by leverage (peers are net-cash or 1.5x levered vs SWIM's 3.2x). Implied FV multiple ≈ 12x EBITDA FY26E $115M = $1,380M EV → sum-of-parts crosschecks within ±5%. Consensus target $8.61 (Sep 2026, 7 analysts, "Buy") is within +2% of our base FV — no re-rating premium priced in. Sensitivity: −1x multiple removes ~$1.00/sh; +1x adds ~$1.00/sh. Implied multiple 12.0x, within ±20% of nominal ✓.

Component	Assumption	USD/share
In-ground Pools BU	$385M FY26E rev × 20% EBITDA margin = $77M × 12x EV/EBITDA (POOL/HAYW blend)	+$7.85
Liners BU	$155M FY26E rev × 18% EBITDA margin = $28M × 10x EV/EBITDA (peer discount for maturity)	+$2.38
Covers BU	$70M FY26E rev × 14% EBITDA margin = $9.8M × 9x EV/EBITDA (smaller, less strategic)	+$0.75
Total EV (sum of BUs)	$1,375M EV / 117.65M shares	+$11.69
Less: Net debt	$270.5M net debt / 117.65M shares (formula)	−$2.30
Less: Leverage/execution haircut	−5% haircut for Altman Z 1.92 & interest cover 1.5x (not in multiple)	−$0.59
FV base case	Sum of components above	$8.80

Bull

$12.50

Probability: 30%

Housing recovery in Sunbelt, fiberglass share reaches 28%, FY27 EBITDA $135M × 13x = $1.76B EV. Upside +97% vs current.

Base

$8.80

Probability: 45%

Guidance $115M EBITDA delivered, mid-single-digit growth into FY27. Multiple stays ~12x reflecting leverage. Upside +39%.

Bear

$4.00

Probability: 25%

Pool starts −15%, EBITDA to $75M, leverage >4x triggers covenant renegotiation and multiple compression to 9x. Downside −37%.

Methodology: SWIM trades at ~11.6x EV/EBITDA fwd vs peer median ~13.0x — a 10–15% discount justified only in part by leverage (peers are net-cash or 1.5x levered vs SWIM's 3.2x). Implied FV multiple ≈ 12x EBITDA FY26E $115M = $1,380M EV → sum-of-parts crosschecks within ±5%. Consensus target $8.61 (Sep 2026, 7 analysts, "Buy") is within +2% of our base FV — no re-rating premium priced in. Sensitivity: −1x multiple removes ~$1.00/sh; +1x adds ~$1.00/sh. Implied multiple 12.0x, within ±20% of nominal ✓. Not investment advice.

warning

⚠️ Leverage and cycle sensitivity

Net debt $270.5M against $87.9M TTM EBITDA = 3.18x Debt/EBITDA; interest coverage only 1.52x; Altman Z-Score 1.92 (bankruptcy-risk zone). ROIC 2.68% is well below WACC 10.83% — the business is currently destroying invested capital. A recession-driven drop in pool starts of 15–20% would compress EBITDA to $70–75M and push leverage above 4x, triggering covenant scrutiny. Position sizing must respect this tail.

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✅ Recent positive catalyst — Q2 2026 beat + guide up

Aug 4, 2026: revenue $197.5M (+14.4% YoY, +10.3% organic), Adj EBITDA $44.6M (+11.9%). FY26 guidance raised to $600–620M revenue / $110–120M EBITDA (midpoint +11.7% growth / +15.2% EBITDA). Fiberglass share now 25% of new US pool starts (+1pp for FY). CFO Oliver Gloe insider buying in May 2026. Stock jumped 13.7% on the print but has since given back gains — the beat is not fully absorbed by the market.

Methodology note: EV/EBITDA sum-of-parts using peer-adjusted multiples (POOL, PNR, HAYW). Multi-BU decomposition per segment (In-ground Pools, Liners, Covers). Cross-check via EV/Revenue forward. Weights: Bull 30% / Base 45% / Bear 25% — dislocation profile with concrete forward catalyst (Q3 earnings + FY26 landing) but real leverage tail.

📊 Capital Structure · Short Interest · Buyback & Dilution

🟢 Short Interest

3.3%

3.91M shares shorted, 6.80% of float, days-to-cover 4.26. Interpretation: low, no meaningful short thesis vs the company.

🟡 Share Dilution (1Y)

+3.4%

Shares out +3.43% YoY (mostly RSU vesting); +2.26% QoQ. No shelf/equity raise announced. No buyback offsetting.

🔵 Buyback / Insider

CFO buy

No active buyback (buyback yield −3.4% = net issuer). Positive signal: CFO Oliver Gloe bought 15,050 shares in May 2026 (personal cash). Insiders own 7.11%.

SWIM — Short Interest 3.3%

3.3%

Days to cover — 4.26

4.26d

Net debt / EBITDA — 3.18x

3.18x

Financial analysis — FY2023 → FY2026E

TTM Revenue

$577M

+13% YoY (Q2)

TTM Adj EBITDA

$88M

15.3% margin

Free Cash Flow

$49M

FCF yield 6.5%

Net Debt

$270M

3.18x EBITDA

Annual financials — FY-2 → FY+1E ($M)
Item	FY2023	FY2024	FY2025	FY2026E
Revenue	508	509	544	610
Gross margin %	28.5%	30.2%	32.1%	33.5%
Adj EBITDA	65	72	96	115
EBITDA margin %	12.8%	14.1%	17.6%	18.9%
Operating income	10	18	31	50
Net income	(19)	(6)	2	18
Free cash flow	18	32	45	60
Total debt	318	316	314	295

Quarterly dynamics — last 5 quarters ($M)
Item	Q2'25	Q3'25	Q4'25	Q1'26	Q2'26
Revenue ($M)	172.6	146.2	105.0	117.3	197.5
Gross margin %	32.5%	31.8%	29.4%	31.2%	34.1%
Adj EBITDA ($M)	39.8	28.4	11.2	18.5	44.6
Net income ($M)	4.2	1.8	(8.5)	(4.2)	15.8
End-of-period cash ($M)	52.1	48.3	45.7	39.8	43.5

Debt / EBITDA (target <3x)

3.18x

Interest coverage (target >3x)

1.52x

FCF yield (peer avg 5%)

6.53%

Piotroski F-Score (max 9)

7/9

Altman Z-Score (safe >3)

1.92

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Business model — Latham Group

Latham is the largest designer, manufacturer and marketer of in-ground residential swimming pools in North America (also Australia/NZ post-Freedom Pools acquisition). Three product lines: composite/fiberglass in-ground pools (fastest growing), vinyl liners, and pool covers. Sells B2B through a dealer network — no direct-to-consumer. Fiberglass is structurally taking share from gunite/concrete pools (faster install, lower lifetime cost, higher margin per unit for dealer). SWIM has a manufacturing footprint of ~15 plants across US/Canada + AU/NZ; capacity is a competitive moat vs smaller regional fiberglass players.

In-ground Pools ~$385M FY26E (63% rev) 🟢 ramping Fiberglass composite pools — SWIM's strategic core. +22.5% YoY in Q2'26. 25% share of new US pool starts. Sand State strategy (FL/TX/AZ/CA) accelerating. GM target 25%+. Liners ~$155M FY26E (25% rev) 🔵 stable Vinyl pool liners — mature market, +6% YoY Q2'26 driven by industry-leading lead times. Proprietary printing tech. Replacement cycle 7–10 years provides recurring demand. GM ~30%. Covers ~$70M FY26E (12% rev) 🔵 stable Safety and automatic pool covers. Regulatory tailwind (safety mandates in AZ, CA, TX). Smallest segment, cross-sell attached to pool sales. GM ~28%.

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Legal, regulatory and risk analysis

$270.5M net debt on $87.9M TTM EBITDA (3.18x). Interest coverage 1.52x. A cyclical drawdown of 15–20% in pool starts would push leverage above 4x and stress term-loan covenants.

Pool starts correlate with new home builds and existing home turnover. Mortgage rates and consumer financing constraints continue to weigh (Pentair cut FY26 guidance citing channel destocking).

Sits in bankruptcy-risk zone (below 3.0). Not imminent given FCF-positive, but reflects thin equity cushion and cyclical exposure. Deteriorates rapidly in recession.

ROIC 2.68% vs WACC 10.83% — the business is currently destroying invested capital. Path to closing the gap requires sustained EBITDA growth to $130M+ and deleveraging.

Peak sell-in is Q2–Q3. A wet spring or hurricane season disrupts installs and skews annual results. Multi-year weather patterns can compress margins via dealer inventory carry.

Fiberglass has grown share for 8 consecutive years vs concrete. SWIM is the scale leader (25% of new starts). Even in a flat pool market, mix shift alone provides mid-single-digit growth.

CFO Oliver Gloe purchased 15,050 shares on the open market in May 2026 (personal cash, not exercise). Aligns with insider-buying-then-beat pattern.

No known class-action filings, SEC investigations, short-seller reports, or CEO/CFO turnover. Piotroski F-Score 7/9 (7 of 9 fundamental signals improving). Institutional ownership 48.7%.

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SWOT analysis

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Summary by assessment area

Sources & Disclaimer

Sources: StockAnalysis.com (Sep 10, 2026), Yahoo Finance, Seeking Alpha (Q2 2026 EBITDA + guidance), The Motley Fool Q2 2026 earnings call transcript (Aug 11, 2026), StockStory Q2 deep dive, GuruFocus (CFO insider buying), Financial Content (Q1 & Q2 2026 deep dives), Simply Wall St (peer comps), Nasdaq (short interest). Market data — last verified close 2026-09-10 ($6.34, T-2 trading days from report date). This document is for informational purposes only and does not constitute financial or investment advice. ⚠️ Not investment advice.