Hayward Holdings, Inc. (HAYW): what the price assumes

In the published model solve dated 2026-Q2, anchored at $14.15, Hayward Holdings, Inc. (HAYW) is priced for +6.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/HAYW

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.

Per-Model Detail (n=16)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Hayward makes the pumps, filters, heaters, cleaners, and sanitizers that keep swimming pools running, a business the 10-K frames around the pool's "significant aftermarket requirements, such as the ongoing repair, replacemen[t]" of equipment on millions of installed pools.
• The decisive feature is that recurring replacement demand, not new pool construction, which is what lets a discretionary-sounding company hold a 46.5% gross margin through a soft housing cycle.
• The price is the question: at about 22 times operating income it embeds roughly 17% annual operating-profit growth, faster than the business has been growing, so the recurring base has to keep carrying it.

Bull Case

Anchor on one number, because it reframes the whole company: the share of revenue that comes from replacing equipment on pools that already exist. Hayward looks like a discretionary, housing-linked manufacturer, the kind that should swing hard with new-pool construction. But the 10-K describes the industry's defining trait as its aftermarket: the pool is "the centerpiece of the growing outdoor living space" with "significant aftermarket requirements, such as the ongoing repair, replacemen[t]" of equipment. A pump or a heater wears out and gets replaced whether or not anyone is building new pools, and there is a large installed base of pools that each need that maintenance. That recurring demand is why Hayward held a 46.5% gross margin in the first quarter even with new construction subdued, and why a business that sounds cyclical behaves more like a consumables maker.

The upgrade cycle layers growth on top of the replacement base. The 10-K notes that "aftermarket replacements and upgrades to higher value IoT and energy efficient models" are a driver, and the company is pushing exactly that with its OmniX connected-product platform, which contributed to favorable adoption in the aftermarket and commercial segments. When a homeowner replaces a failed pump, selling them a smarter, more efficient, higher-priced model lifts both revenue and margin on the same unit of demand. That is a structural way to grow faster than the installed base itself.

The recent execution shows the model working. First-quarter net sales rose 12% to $255.2 million, with North America up 12% and Europe and the rest of world up 9%, and gross margin expanded to 46.5% as pricing and operating efficiencies more than offset inflation and tariffs. Management raised full-year guidance on the strength of resilient aftermarket demand, and the share count has been falling about 2% a year through buybacks. The bull case is a high-margin pool-equipment maker whose recurring replacement-and-upgrade base makes it far more resilient than its discretionary label suggests.

Bear Case

Set the marketing aside and look at the disconnect: this is a company whose end demand is tied to swimming pools, one of the more discretionary purchases a household makes, priced as if it will grow operating profit at nearly 17% a year for five years. That pace is faster than Hayward has been growing, and the first quarter's 12% sales growth leaned on pricing and favorable currency as much as on volume. New pool construction remains well below its pandemic-era peak, and while the aftermarket cushions that, it does not replace the higher-margin pull-through that comes when new pools are built and equipped for the first time. A price built on high-teens growth has to assume either a construction recovery or an upgrade cycle strong enough to substitute for one, and neither is guaranteed.

The channel adds fragility the smooth growth story hides. Hayward sells mostly through distributors, and the 10-K is candid that "most of our sales are to distributors whose inventory of our products may vary, including due to reasons beyond our control, such as end-user demand." Distributor destocking and restocking can make Hayward's reported sales swing more than underlying demand, so a strong quarter can be borrowed from a weak one and vice versa. The company also relies on "volume rebate programs with key distributors" to support sales, which is a margin cost and a sign that the channel has bargaining power.

Leverage and input costs frame the downside. Net debt of roughly $730 million runs at about three times operating income, manageable in good times but a fixed claim that bites if a soft pool season pressures earnings. On costs, the company is fighting inflation and tariffs and has so far offset them with price, but pricing power in a discretionary category is finite: push too hard and homeowners defer the upgrade or choose a cheaper replacement. The valuation methods read the price as expensive on assets and earnings, with only the growth and peer-multiple lenses reaching it, which is the pattern of a stock priced for a continuation of strength rather than for the cyclical reality underneath. The bear case is that a good, well-run pool-equipment maker is being asked to grow like a secular compounder, when its demand is discretionary, its channel is lumpy, and its recent growth owes a lot to price.

Valuation

Hayward trades at about 22 times company-wide operating income, and inverting that says the market is paying for roughly 17% annual operating-profit growth over five years. The current operating margin near 21% is well above the roughly 10% the price strictly requires, so this is a growth bet rather than a margin-recovery bet, and the implied pace is demanding: faster than the company's recent top-line growth, and a level only about 42% of comparable companies sustained even five years.

The families of method split the way they do for a quality cyclical priced at a premium. Asset value and earnings power both read the price as expensive, by roughly 1.8 and 1.9 times, because they capitalize what Hayward has earned and owns today. Peer multiples place it modestly above the water-and-industrial-equipment cohort, and the forward-growth method reaches the price. The pattern says the stock is not cheap on its current fundamentals; it is a bet that the aftermarket and upgrade-driven growth persists at a high rate. The most useful anchor is the comparison to its closest pool and water-equipment peers, against which Hayward is priced at a premium, so the buyer is paying for its margin profile and recurring base rather than getting a discount.

Solvency bounds the downside without removing the cyclical risk. Net debt of roughly $730 million at about three times operating income is serviceable in a normal pool season, though interest coverage is not cleanly computable from the latest filings, which argues for treating the leverage as a real constraint rather than a comfort. The offsetting positives are the high gross margin that throws off cash and the steady buyback that has reduced the share count about 2% a year. A buyer at this price is underwriting a discretionary-but-recurring pool-equipment maker to grow operating profit at a high-teens pace, relying on the installed-base replacement demand and the upgrade cycle to carry the growth through a still-soft new-construction market, and paying a premium that the value methods do not support if that growth proves more ordinary.

Catalysts

Hayward's first quarter of 2026 beat and prompted a guidance raise. Net sales rose 12% to $255.2 million, GAAP earnings per share of $0.13 topped estimates, and gross margin expanded to 46.5% as pricing and operating efficiencies offset inflation and tariffs. North America grew 12% and Europe and the rest of world grew 9%, and management raised full-year guidance, citing resilient aftermarket demand and disciplined regional expansion.

The product cycle and the channel are the catalysts to track. Adoption of the OmniX connected-product platform and other newly launched discretionary products contributed to favorable trends in the aftermarket and commercial segments, so the pace of that upgrade adoption is the clearest read on whether Hayward can grow faster than the installed base. On the other side, because most sales run through distributors whose inventory can swing, the quarter-to-quarter sales pattern can reflect channel restocking as much as end demand, which the next prints will clarify.

The variables that move the fundamental story are the trajectory of new pool construction against the still-soft housing backdrop, the durability of pricing power in a discretionary category facing tariffs and inflation, and the rate of aftermarket upgrade adoption. The next quarterly report, covering the heart of the pool season, will show whether the aftermarket resilience and the raised guidance hold and whether volume, not just price, is driving the growth the valuation assumes.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• PNR (Pentair plc)
• FY2025 10-K: …global companies, regional and local companies, diversified and pure-play companies, and lower-cost manufacturers. Competition may also result from new entrants into, or consolidation among competitors in, the markets we serve offering products and/or services that compete with ours. We compete based on technical…
• FY2025 10-K: …rates, inflation rates and energy and commodity prices. Recessions, economic downturns, inflation, slowing economic growth and social and political instability in the industries and/or markets where we compete could negatively affect our revenues and financial performance in future periods, result in future…
• IEX (IDEX CORP)
• FY2025 10-K: …impact the Company and its financial condition, results of operations and cash flow. The Markets Served by the Company are Highly Competitive and this Competition Could Reduce Sales and Profit Margins. Most of the Company's products are sold in competitive markets. Maintaining and improving a competitive position…
• FY2025 10-K: …agriculture and semiconductor businesses, partially offset by higher volume in the municipal water businesses, which together more than offset the benefit of positive price across the segment. • Adjusted EBITDA margin increased primarily due to positive price/cost as well as net productivity improvements. These…
• GRC (The Gorman-Rupp Company)
• FY2025 10-K: Gross margin 30.6 % 31.0 % Gross profit was $209.1 million for 2025, resulting in gross margin of 30.6%, compared to gross profit of $204.3 million and gross margin of 31.0% for the same period in 2024. Gross profit for 2025 included $2.7 million of one-time facility optimization costs. The 40 basis point decrease in…
• FY2025 10-K: …Pricing pressures may require the Company to adjust the prices of its products downward to stay competitive. The Company may not be able to compete successfully with its existing competitors or with new competitors. Failure to compete successfully could negatively impact the Company's sales, operating margins and…
• ZWS (ZURN ELKAY WATER SOLUTIONS CORPORATION)
• FY2025 10-K: …in which we participate are relatively fragmented with competitors across a broad range of industries, sectors, and product lines. Although competition exists across all of our businesses, we do not believe that any one competitor directly competes with us across the breadth of all of our product lines. We believe…
• FY2025 10-K: …attacks, misuse of artificial intelligence tools, and any inability of these systems to fulfill their intended business purpose, could impede our ability to record or process orders, manufacture and ship in a timely manner, account for and collect receivables, protect sensitive data of the Company, our customers, our…
• MWA (MUELLER WATER PRODUCTS, INC.)
• FY2025 10-K: …on trends, value creation, long-term strategies and the execution or acceleration thereof, operational improvements, inventory positions, the benefits of capital investments, financial or operating performance, including driving increased margins, operational and commercial initiatives, capital allocation and growth…
• FY2025 10-K: …Water Management Solutions business unit were approximately 42% of fiscal 2025 consolidated net sales. Business Strategy Our business strategy is to capitalize on the large, attractive and growing water infrastructure markets worldwide. Key elements of this strategy are as follows: Improve operational excellence and…
• ESAB (ESAB Corporation)
• FY2025 10-K: …design and application engineering support. We believe the principal elements of competition in our served markets are the technical ability to meet customer specifications, product quality and reliability, brand names, price, application expertise and engineering capabilities, timely delivery and strong aftermarket…
• FY2025 10-K: …the business. (4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates. (5) Numbers calculated following the same definition as total sales growth for total Company. (6) Represents sales excluding…
• RRX (REGAL REXNORD CORP)
• FY2025 10-K: …have an adverse effect on our business, results of operations and financial condition. In certain markets, customers exercise significant power over business terms. There is substantial and continuing pressure on major OEMs and larger distributors to reduce costs, including the cost of products purchased from outside…
• FY2025 10-K: …based on the segment's income from operations. The Company also regularly provides to the CODM information on adjusted cost of sales and adjusted engineering, selling and administration expenses, which are significant expenses. The following sets forth certain financial information attributable to the Company's…
• GTES (Gates Industrial Corporation plc)
• FY2025 10-K: …to grow or maintain our competitive position or margins. We compete in a wide variety of end markets with a broad portfolio of products. Our ability to compete effectively in each end market depends on how successfully we anticipate and respond to various local competitive factors, such as product offerings, customer…
• FY2025 10-K: …a variety of industrial and automotive customers. Our industrial OEM customers cover a diverse range of industries and applications and many of our largest OEM customers manufacture construction and agricultural equipment. 32 Table of Contents During Fiscal 2025, we realized modest growth in our aftermarket channel…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.