POOL changes
Pick any two versions below to diff them.
- Price
- $161.87 → $159.54(−1.4%)
- Discount category
- Below intrinsic value → Well below intrinsic value
- Next earnings is estimate
- Yes → No
- Thesis
- Investors discount Pool Corporation because they fear the pandemic-era pool-building boom is over for good. A sudden CEO change and Berkshire Hathaway's full stock exit add to this caution. But most of Pool Corporation's sales come from maintenance and repair, not new construction. Pool owners buy chemicals and replace parts every year, whether or not new pools get built. For the discount to close, maintenance demand must keep growing even while new construction stays weak. New CEO John Watwood must also show he can run the company without disruption after a sudden leadership change. Investors get an early read in the Q3 2026 removed: report, expected added: report on October 22, 2026, which covers the peak pool season. A fuller picture, including whether new-pool construction has found a bottom, likely needs two to four more quarters. If maintenance demand proves durable and margins stabilize, the discount can close over that time.
- Balance sheet
- added: Cash: $29M Debt: $1.3B Net debt: $1.3B Net debt / EBITDA: 1.8× (low) Interest cover: 13× Undrawn credit line: $360M, to September 2029 Pool Corporation has no public removed: bonds. Its total added: bonds, and all its debt removed: of $1,341 million at June 30, 2026 is removed: all variable-rate bank and securitization debt, mostly at the parent level. The added: debt is seasonal: it peaks in the second quarter, when supplier payments for winter inventory fall due, and it falls as customers pay in the summer. At June 30, 2026, the unsecured Credit Facility had $424 million drawn on an $800 million revolver, plus a $500 million term loan, both due September 30, 2029. A separate $90 million term facility has the same final date. A $316 million receivables securitization facility is secured by $447 million of pledged customer receivables. On August 25, 2026, Pool extended this facility to August 25, 2028. The removed: debt added: leverage ratio is removed: seasonal. It peaks in the removed: second quarter, when supplier payments for winter inventory fall due, and it falls as customers pay in the summer. The covenant leverage removed: ratio was 1.78 at June 30, 2026. This added: ratio. It is inside management's 1.5 to 2.0 target and far below the 3.25 maximum. removed: In the first half of 2026, added: Interest cover is operating income removed: of $350 million covered added: over net interest and other non-operating expense added: in the first half of removed: $27 million about 13 times. added: 2026. Two interest rate swaps fix the rate on $300 million at about 0.7% until February 26, 2027. Interest cost on that part will rise when the swaps end. The company also has $355 million of operating lease liabilities for its sales centers. removed: Cash was only $29 million, but $360 million was added: The undrawn credit is the amount available under the Credit Facility. The company uses borrowings, not cash, to fund buybacks, with $580 million of authority left at July 23, 2026. The debt does not limit its choices today. As of Jun 30, 2026.
- Checkpoints
- Oct 22, removed: 2026 (estimate): added: 2026: Q3 2026 results: peak-season maintenance sales and gross margin. Pending. Watch: Sales growth from maintenance products, a stable gross margin near 30% and confirmed 2026 adjusted EPS guidance of $10.87 to $11.17 pass; lower sales or a guidance cut fails. Feb 2027 (estimate): Full-year 2026 results and first 2027 outlook from new CEO. Pending. Watch: A 2027 outlook with EPS growth and signs that new-pool construction has stopped falling passes; flat or lower EPS guidance or a new strategy that disrupts operations fails. Jul 2027 (estimate): Q2 2027 results: second peak season under CEO Watwood. Pending. Watch: Sales and operating income above Q2 2026 with stable margins pass; a second year of falling operating income fails.