POOL CORPORATION (POOL): what the price assumes
In the published model solve dated 2026-Q2, anchored at $188.07, POOL CORPORATION (POOL) is priced for +2.3% 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 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/POOL
Headline
| Field | Value |
|---|---|
| Ticker | POOL |
| Company | POOL CORPORATION |
| Current price | $188.07/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 4.0% |
| Operating margin today | 10.9% |
| Margin compression (value-band) | -6.9pp |
| Implied growth | 2.3% |
| Multiple paid | 14x operating income |
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)
| Reference | Value |
|---|---|
| vs own history | -0.47σ |
| cohort percentile (of 225 peers) | 23 |
Valuation X-Ray
The price is justified by relative-multiple; earnings-power/growth-DCF 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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.28x | 4 | expensive |
| Earnings | 3.25x | 5 | expensive |
| Relative | 1.05x | 3 | expensive |
| Growth | 1.63x | 4 | expensive |
Families that justify the price: Relative Families that call it expensive: Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $98.87 | 1.90x | yes | FCF base $0.3B, growth 2% (input: historical growth), terminal g 1.9%, WACC 8.3%, 5yr projection |
| DCF Exit Multiple | Growth | $171.37 | 1.10x | yes | Exit EV/EBITDA: 12.2x / 14.2x / 16.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $178.62 | 1.05x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $73.85 | 2.55x | yes | Stage 1: -1% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $120.47 | 1.56x | yes | BV/sh $31.10, ROE (TTM) 35.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $254.82 | 0.74x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $139.22 | 1.35x | yes | Rev $5.4B, growth 2% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.3x / 1.5x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $165.01 | 1.14x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.75B × (1−21%) / WACC 8.3% → EPV (no growth) |
| Residual Income | Asset | $188.28 | 1.00x | yes | BV $31.10 + 5yr PV of (ROE (TTM) 35.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $87.25 | 2.16x | yes | √(22.5 × EPS $10.88 × BVPS $31.10) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $152.76 | 1.23x | yes | EBITDA $0.60B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $49.11 | 3.83x | yes | FCF $312.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $42.54 | 4.42x | yes | SBC-adj FCF $0.29B (FCF $0.31B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $57.88 | 3.25x | yes | EPS $10.88 × (8.5 + 2×-1.1%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $9.03 | 20.83x | yes | BV $31.10 × (ROIC 2.4% / WACC 8.3%) (excluded from median) |
| P/Sales Sector | Relative | $367.42 | 0.51x | yes | Revenue $5.36B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $117.62 | 1.60x | yes | EPS $10.88 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Pool and outdoor living distribution (single reportable segment) | operating | enterprise | 5.3B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $1.2b |
| Net debt / NOPAT (after-tax) | 2.59x |
| Net debt / operating income (pre-tax) | 2.04x |
| Share count CAGR (buyback) | -2.5% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- POOL is the largest wholesale distributor of swimming-pool supplies, and most of its volume is non-discretionary maintenance for an installed base of in-ground pools. That recurring demand is what makes a distribution business worth more than its thin operating margin suggests.
- At $198.97 the price embeds only about 3.9% company-wide operating-profit growth per year for five years, a modest bar that sits in the lower half of the peer multiple range and within what the company has recently delivered.
- The cyclical swing factor is new pool construction and remodel demand, roughly a fifth of sales, which is discretionary and still depressed. A reasonable-growth re-pricing puts the base above the current price, but the earnings-power methods read the quote as full.
Bull Case
Distribution is a deceptively hard sector to value, because the operating margin looks thin while the economics are durable. POOL converts roughly eleven cents of operating profit on each sales dollar, which a casual screen reads as a low-margin reseller. The right lens is different: this is a scale aggregator sitting between thousands of fragmented manufacturers and tens of thousands of small pool-service professionals, and the value is in the network, the inventory breadth, and the logistics, not the per-unit spread. The 10-K describes a business "focused on the swimming pool industry in the United States" that is "one of the leading distributors" in its space (FY2025 10-K), and the breadth of its sales-center network is the moat: a service pro can get the part they need, same day, from a location near the job. Competitors are mostly regional and local; matching that footprint is a decade-long capital project.
The demand base is what makes the modest margin compound. Most of POOL's volume is non-discretionary maintenance and minor repair on an installed base of in-ground pools that does not shrink in a recession; a pool still needs chemicals, pumps, and filters whether or not its owner feels wealthy. The first quarter of 2026 showed net sales up 6% to $1.1 billion with operating income up 7% to $82.6 million, driven by that resilient maintenance demand and a gradual recovery in discretionary categories. Management reaffirmed full-year guidance of $10.87 to $11.17 per diluted share. On top of organic growth, the company buys back stock steadily, shrinking the share count and lifting per-share earnings.
The valuation backdrop is more forgiving than for most consumer names. At the current price the implied bar is only about 3.9% operating-profit growth per year, which sits in the lower half of the peer multiple range and is within what POOL has delivered through cycles. A reasonable-growth re-pricing lands the base value above the current quote. So the bet here is not that POOL transforms; it is that the installed base keeps compounding while new-construction demand mean-reverts off a depressed level, and the price asks for very little of the second leg.
Bear Case
The advantage that is quietly eroding is pricing power, and the place it shows is the discretionary mix. POOL's filing is candid that about 22% of sales come from "products used to remodel, renovate, and upgrade pools," and that the growth in that portion "depends on the expansion of the installed pool base, which has been and could in the future be adversely affected" (FY2025 10-K). New pool construction has been weak, and management has not yet seen a positive inflection in discretionary spending. While maintenance is sticky, the higher-margin remodel and new-build work is the swing factor, and a prolonged housing-affordability squeeze keeps it depressed. The company itself acknowledges intense competition "from many regional and local distributors in our markets and from a limited number of other national wholesale" players (FY2025 10-K), so the scale moat does not translate into unlimited pricing.
The valuation work reflects the strain. The earnings-power and forward-growth families read the price as expensive even though the relative-multiple frame supports it. That split means the buyer is leaning on the comparison to other distributors rather than on the cash the business actually throws off. Free-cash-flow-based methods land far below the quote, a sign that the price already capitalizes a recovery in the discretionary categories that has not arrived. With operating margin near 11% and limited room to expand it, the path to justifying the price runs through volume, not margin.
The macro sensitivity is the third leg. POOL is exposed to interest rates and housing turnover, which drive both new pool builds and renovation projects, and to weather, which can pull or push a season. Higher-for-longer rates suppress the discretionary demand the bull case needs to reaccelerate. Analyst sentiment is mixed, with a cluster of Hold ratings and price targets that have been trimmed, which is the market saying the easy post-pandemic tailwind is gone and the next leg has to be earned through a genuine construction recovery.
Valuation
The valuation families disagree in a revealing way. Relative-multiple methods support the $198.97 price (June 27, 2026), placing fair value near it, while earnings-power and forward-growth methods read the quote as expensive, and the free-cash-flow approaches land well below. The asset-based methods are mixed, with the two-stage excess-return frame above the price and the simpler ones below. That spread is typical of a high-quality distributor: the comparison to peers holds the price up, but the absolute cash methods discount the still-depressed discretionary mix.
Inverting the price into the assumption it embeds, the market is paying about 14 times company-wide operating income, which implies roughly 3.9% operating-profit growth per year for five years at an 8.8% cost of capital. That is a low bar, in the lower half of the peer multiple range and within POOL's own recent history; the question is duration, not whether the rate is achievable. A reasonable-growth re-pricing lands a base value above the current quote with a wide upper band, reflecting the optionality if new pool construction recovers.
The honest read is that POOL is reasonably priced for its non-discretionary base and offers upside if the discretionary categories mean-revert, but the absolute cash methods say there is little margin of error at the current quote. The earnings-power methods reading the price as full is the caution; the modest implied growth bar is the comfort. An investor is paying a fair price for a durable distributor and underwriting a construction recovery for the upside.
Catalysts
The near-term catalysts are the seasonal demand reads and the trajectory of discretionary recovery. First-quarter 2026 net sales rose 6% to $1.1 billion with operating income up 7% to $82.6 million and diluted EPS of $1.45, beating estimates, on resilient maintenance demand and a gradual improvement in discretionary categories. Gross margin slipped about 20 basis points to roughly 29% on product mix. Management reaffirmed full-year 2026 guidance of $10.87 to $11.17 per diluted share and expects low single-digit net sales growth, with 1% to 2% from inflation and pricing.
The swing catalyst is new pool construction and remodel demand. Management has said it has not yet seen a positive inflection in discretionary spending, so any sign of a turn, helped by lower mortgage rates or improving housing turnover, would be the event that reaccelerates the higher-margin part of the mix. Continued private-label growth and supply-chain efficiency are the margin levers management is pulling while it waits.
Capital return is a steady undercurrent: POOL keeps repurchasing shares, which supports per-share earnings even in a low-growth year. Analyst sentiment is mixed, with Buy and Hold ratings roughly balanced and several firms trimming price targets toward the high $200s to low $300s as the post-pandemic surge normalizes. Leslie's and Hayward remain the competitive reference points, but POOL's distribution scale keeps it the structural leader.
Sources:
- https://www.globenewswire.com/news-release/2026/04/23/3279727/10055/en/pool-corporation-reports-first-quarter-results-and-confirms-annual-earnings-guidance-range.html
- https://www.indexbox.io/blog/pool-corp-pool-q1-2026-earnings-beat-revenue-estimates-eps-surpasses-consensus/
- https://www.investing.com/news/transcripts/earnings-call-transcript-pool-corporation-beats-q1-2026-estimates-stock-surges-93CH-4633487
- https://stockanalysis.com/stocks/pool/
- https://www.tikr.com/blog/pool-corp-stock-plunges-14-on-sluggish-pool-builds-heres-where-the-stock-could-be-headed-in-2026
Peer Cohorts (Per Segment, With Filing Citations)
Pool and outdoor living distribution (single reportable segment) (reported)
- SITE (SiteOne Landscape Supply, Inc.)
- FY2025 10-K: …entities to disclose events that occur after the end of the last annual reporting period. The new standard is effective for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact the amended guidance will have on…
- FY2025 10-K: …distribution. We may not always be able to reflect these changes in our pricing. The strategic initiatives described above are designed to reduce our exposure to these fluctuations and maintain and improve our efficiency. 40 Table of Contents Results of Operations In the following discussion of our results of…
- WSO (WATSCO INC)
- FY2025 10-K: …customer. We have approximately 1,100 salespeople, averaging 11 years of experience in the HVAC/R distribution industry. The markets we serve are as follows: % of Revenues for the Year Ended December 31, 2025 Number of Locations as of December 31, 2025 United States 90 % 637 Canada 5 % 34 Latin America and the…
- FY2025 10-K: 10-K for further discussion. Distribution Agreements We maintain trade name and distribution agreements with Carrier, Rheem, Mitsubishi, and others, that provide us with distribution rights on an exclusive basis in specified territories and are not subject to a stated term or expiration date. We also maintain…
- FERG (Ferguson Enterprises Inc.)
- FY2025 10-K: …impairment analysis for goodwill during the fourth quarter of fiscal 2025. Based on the results of the Company's analysis, the Company concluded that the fair value of each reporting unit was substantially in excess of its respective carrying value. There were no impairment charges related to goodwill in fiscal 2025,…
- FY2025 10-K: …expectations; and • other risks and uncertainties as set forth under the heading "Risk Factors" in Item 1A of this Annual Report. 2 Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other…
- CNM (Core & Main, Inc.)
- FY2025 10-K: …product availability, payment terms and pricing. Our scale also enables us to secure distribution rights that are either exclusive or given to a limited number of distributors in key product categories, and to provide key products to customers that are unavailable to our competitors. Our size and national reach,…
- FY2025 10-K: …110,644 - - - 1 - - - 1 Forfeiture of Class A Shares and Partnership Interests ( 20 ) - ( 34,703 ) - - - - - - Non-controlling interests adjustment for purchase of Partnership Interests and vesting of Core & Main Holdings, LP Partnership Interests held by non-controlling interests - - - - ( 12 ) - - 12 - Balances at…
- AIT (APPLIED INDUSTRIAL TECHNOLOGIES, INC.)
- FY2025 10-K: 21,639 Other expense, net 1,701 Income before income taxes $ 449,811 1 The Company accounts for inter-segment sales using market rates. 2 Amortization of intangibles is recorded within selling, distribution, and administrative expense, and therefore included in segment operating income for all periods presented. 59…
- FY2025 10-K: …of trade receivables from customers. Management monitors accounts receivable by reviewing Days Sales Outstanding (DSO) and the aging of receivables for each of the Company's operations. On a consolidated basis, DSO was 56.6 at June 30, 2025 versus 56.2 at June 30, 2024. Approximately 2.1% of our accounts receivable…
- MSM (MSC INDUSTRIAL DIRECT CO., INC.)
- FY2025 10-K: …us-gaap:SalesRevenueNetMember 2023-09-03 2024-08-31 0001003078 msm:PublicSectorMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2022-09-04 2023-09-02 0001003078 msm:RetailWholesaleMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-09-01 2025-08-30 0001003078…
- FY2025 10-K: …dilutive shares of Common Stock equivalents outstanding during the period. The dilutive effect of potential shares of Common Stock is determined using the treasury stock method. The following table sets forth the computation of basic and diluted net income per common share under the treasury stock method for fiscal…
- DXPE (DXP Enterprises, Inc.)
- FY2025 10-K: 159 Current finance Other current liabilities 7,660 5,321 Non-current finance Other long-term liabilities 13,223 11,055 Total lease liabilities $ 97,430 $ 64,456 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in…
- FY2025 10-K: ) Change in fair value of contingent consideration 1,406 745 1,738 Other, net ( 709 ) 504 ( 413 ) Other income $ ( 2,882 ) $ ( 3,517 ) $ ( 1,355 ) 78 Table of Contents NOTE 19 - REVENUE The Company disaggregates revenue based upon our geography and our reportable segments - Service Centers, Innovative Pumping…
- GWW (W.W. GRAINGER, INC.)
- FY2025 10-K: …are owned and leased. These facilities range in size from under 1,000 to over 1 million square feet. (5) In Canada, Grainger has 32 branch locations, five DCs and other facilities which total two million square feet. (6) In Mexico, Grainger has 15 branch locations, two DCs and one other location which total 650,000…
- FY2025 10-K: …or liabilities as of December 31, 2025 and 2024. 45 Cost of Goods Sold (COGS) COGS, exclusive of depreciation and amortization, includes the purchase cost of goods sold net of vendor considerations, in-bound shipping costs, outbound shipping and handling costs and service costs. The Company receives vendor…
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.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- 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.