# Hayward (HAYW)

Sector: Pool equipment

| Field | Value |
|---|---|
| Price | $11.74 |
| Fair value (Analysts) | $18.00 |
| Discount to fair value | 34.8% |
| Fair value uncertainty (Analysts) | High |
| Economic moat (Analysts) | Narrow |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.33 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-10-29 (estimate) |

## In short

The market fears that weak pool spending and tariffs will stop Hayward's price-led growth, and stable volume and margins over the next three to five quarters can close the gap.

## Themes and gap

- Themes: Weak consumer (weak-consumer), Interest rates (interest-rates), Tariffs and trade (trade-tariffs)
- Gap type: Can close (closable)
- Why: The Q3 2026 report, the 2027 guidance in February 2027 and the 2027 pool season show whether volume and margins hold.

## About

Hayward designs and makes equipment for swimming pools and outdoor living, such as pumps, filters, heaters, cleaners, lights, sanitizers and automation controls, and it also makes industrial flow control products. It estimates its share of the North American residential pool market at about 33%. About 85% of its North American residential pool sales go to the aftermarket, which repairs, replaces and upgrades equipment on existing pools, so most demand repeats each year. It sells mostly through pool equipment distributors, and it has an Early Buy program that gives customers longer payment terms before the season. Its SmartPad equipment connects pool products to an app. It reports two segments: North America, with $277.7 million of net sales in Q2 2026, and Europe and Rest of World, with $40.7 million.

## Thesis

The market doubts that Hayward can keep growing while pool spending is weak. High interest rates and a cautious consumer slow new pool construction and large remodels, and in 2026 most of Hayward's sales growth came from higher prices that offset inflation and tariffs. Tariff costs also lowered gross margin by 50 basis points to 48.7% in Q2 2026, and sales in Europe and Rest of World fell 8% because of the conflicts in the Middle East. Investors fear that price increases can not continue, and that volume can fall if consumers cut back. For the gap to close, three things must be true. Hayward must meet its 2026 guidance of about 5% net sales growth and adjusted diluted EPS of $0.84 to $0.87. Volumes must stay stable or grow, which shows that the aftermarket base holds up when prices rise. Gross margin must stay near 49% or better while tariffs remain. Hayward has room to act, because net leverage fell to 1.5 times on June 27, 2026, and it bought back $58.0 million of shares in Q2 2026. The Q3 2026 report, expected at the end of October 2026, and the full-year report with the first 2027 guidance in about February 2027 give the evidence. If sales and margins hold, the gap can close over the next three to five quarters. If the consumer weakens further, the gap can stay until pool construction recovers.

## Checkpoints

- Oct 29, 2026 (estimate): Q3 2026 results: volume, price and margin. Status: Pending. Watch: Net sales growth with stable volume, gross margin near 49% and the 2026 guidance kept pass; falling volume or a cut to the guidance fails.
- Feb 2027 (estimate): Full-year 2026 results and 2027 guidance. Status: Pending. Watch: Adjusted diluted EPS of $0.84 to $0.87 for 2026 and a 2027 outlook with sales and earnings growth pass; a 2027 outlook with lower sales fails.
- Jul 2027 (estimate): Q2 2027 results: the main pool season. Status: Pending. Watch: Volume growth in North America in the main season passes; a second year of growth only from price, with lower volume, fails.

## Balance sheet

- Cash: $483M
- Debt: $965M
- Net debt: $482M
- EBITDA, last 12 months: $311M
- Net debt / EBITDA: 1.5× (low)
- Interest cover: 4.2×
- Undrawn credit line: $426M
- Debt due within 12 months: $11M
- Last debt due: 2033

Hayward's debt is mostly a secured term loan of $960.0 million due June 23, 2033, which it refinanced on June 23, 2026, at term SOFR plus 2.00%. Debt also includes $1.3 million of other bank debt and $3.9 million of finance leases. Interest rate swaps fixed the rate on $600.0 million of the variable rate debt; $350.0 million of the swaps end in 2027 and $250.0 million in March 2028. Cash is $304.1 million of cash and $179.3 million of short-term investments at June 27, 2026. EBITDA is adjusted EBITDA for the last twelve months, and the company's net leverage was 1.5 times, its lowest since its 2021 IPO. Interest cover is operating income divided by net interest expense for the first half of 2026, and Q2 interest included $5.2 million of refinancing costs. Hayward was in compliance with all covenants. The new $425.0 million revolving facility runs for five years, to about June 2031, and $425.6 million in total was available under its revolving credit facilities. It had $382.3 million left under its share repurchase program, which runs to July 28, 2028.

As of 2026-06-27.

Sources:

- https://www.sec.gov/Archives/edgar/data/1834622/000183462226000047/hayw-20260627.htm
- https://www.sec.gov/Archives/edgar/data/1834622/000183462226000046/a2026q2991er.htm
- https://www.sec.gov/Archives/edgar/data/1834622/000183462226000041/hayw-20260623.htm

## Recent events

- 2026-09-30: Hayward appointed Jared Arrowood, its corporate controller, as Chief Accounting Officer from October 1, 2026. CFO Eifion Jones stays CFO and Treasurer.
- 2026-07-29: Hayward reported Q2 2026 results. Net sales were $318.4 million, up 6%, mostly from higher prices. Gross margin fell 50 basis points to 48.7% because of tariffs and inflation. Net income was $45.6 million, and adjusted diluted EPS was $0.26, up 8%. North America sales grew 9%, and Europe and Rest of World sales fell 8%. Hayward kept its 2026 guidance.
- 2026-06-27: In Q2 2026, Hayward bought back about 4.1 million shares at an average price of $14.24, for about $58.0 million. It also paid the remaining $9.9 million of its securities class action settlement.
- 2026-06-23: Hayward refinanced its bank debt. It borrowed $960.0 million of new term loans due June 23, 2033, at term SOFR plus 2.00%, and signed a $425.0 million five-year revolving credit facility. The refinancing extended maturities without more total debt.
- 2026-04-29: Hayward reported Q1 2026 results. Net sales were $255.2 million, up 12%, from higher prices and higher volume. Adjusted diluted EPS was $0.13, up 30%. Hayward raised its 2026 guidance to net sales growth of about 5% and adjusted diluted EPS of $0.84 to $0.87.

## Risks

- High: Demand depends on consumer spending on pools. High interest rates and a weak consumer slow new pool construction and large remodels. In 2026, most of Hayward's sales growth came from higher prices, and volume can fall if consumers cut back.
- Medium: Tariffs raise Hayward's costs. Gross margin fell 50 basis points to 48.7% in Q2 2026 because of tariffs and inflation. After the US Supreme Court ruled against the IEEPA tariffs on February 20, 2026, the US announced new tariffs under other laws, and Hayward may have to return part of any tariff refund to customers.
- Medium: Sales are seasonal and depend on the weather and on the stock that distributors buy. A cool or wet season, or distributors that cut inventory, can lower sales in a quarter.
- Low: Sales in Europe and Rest of World fell 8% in Q2 2026 because of the conflicts in the Middle East. Shareholder derivative lawsuits about past disclosures are still open, and Hayward can not estimate their cost.

## Links

- Page: https://picks.kamadorueda.com/company/HAYW/
- History of changes: https://picks.kamadorueda.com/company/HAYW/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/HAYW.json

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