Hayward Holdings, Inc.
HAYW
$14.79
+13.51%
Hayward Holdings, Inc. is a leading manufacturer of energy-efficient swimming pool equipment and pool automation systems, offering a comprehensive portfolio of pumps, filters, heaters, LED lighting, and sanitization products to residential and commercial pool markets worldwide. The company operates as a dominant player in the pool equipment industry, with a particularly strong position in the residential aftermarket, where its installed base and brand recognition create recurring demand for replacement parts and upgrades. Hayward's investment narrative centers on the post-pandemic normalization of pool construction and renovation activity, with investors debating whether the company can sustain margin expansion amid softer discretionary spending and elevated interest rates that pressure big-ticket pool projects. Recent attention has focused on the company's ability to drive growth through energy-efficient product adoption, automation, and commercial pool expansion, while managing channel inventory and cost inflation. The stock has faced headwinds as the residential pool market digests the pull-forward of demand from 2020-2021, but management's focus on operational efficiency and cash flow generation remains a key part of the bull case.…
HAYW
Hayward Holdings, Inc.
$14.79
Investment Opinion: Should I buy HAYW Today?
The synthesized recommendation is Hold with a speculative buy bias for risk-tolerant investors. The core thesis is that HAYW is a deeply undervalued industrial franchise with a fortress balance sheet and 42% analyst upside, but the persistent downtrend, margin compression, and lack of near-term catalysts make it premature to commit aggressively until there is evidence of fundamental stabilization. The analyst consensus of 'Buy' with a $17.93 average target and a recommendation mean of 2.4 anchors the view that the risk/reward is skewed positively for patient investors.
The supporting evidence is compelling on several fronts. The forward PE of 13.02 is less than half the trailing PE of 22.07, and the PEG ratio of 0.81 is below 1.0, suggesting the stock is cheap relative to expected growth. Revenue grew 11.53% year-over-year in Q1 2026, an acceleration from roughly flat full-year 2025 revenue of ~$1.1 billion. The balance sheet is pristine with debt-to-equity of 0.0083 and a current ratio of 2.94, while TTM free cash flow of $80.5 million provides flexibility. The 42% upside to the average analyst target and the 18.8% upside even to the lowest target of $15.00 suggest a favorable risk/reward skew.
The biggest risks that could invalidate the thesis are: (1) continued gross margin compression below 44%, which would threaten the $1.44 EPS estimate and the forward PE of 13.02; (2) a breakdown below the 52-week low of $12.41, which could trigger momentum-driven selling toward $10-$11; and (3) a consumer discretionary slowdown that delays the residential pool recovery. The rating would upgrade to Buy if gross margin stabilizes above 45% and revenue growth sustains above 10%, or downgrade to Sell if gross margin falls below 42% or if the stock breaks below $12.41 on high volume. On valuation, the stock appears undervalued relative to its own history (PS of 2.98 vs. historical levels above 15 in 2024) and relative to its growth rate (PEG of 0.81), but fairly valued to slightly expensive on trailing earnings (PE of 22.07).
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HAYW 12-Month Price Forecast
Hayward presents a classic value-versus-momentum dilemma: the fundamentals suggest deep undervaluation with a forward PE of 13.02, PEG of 0.81, and 42% analyst upside, but the technical picture is deeply bearish with the stock down 23.41% over three months and sitting just 1.8% above its 52-week low. The key question is whether the Q1 2026 revenue acceleration of 11.53% year-over-year and the fortress balance sheet can offset the 637 basis point gross margin compression and negative Q1 free cash flow of -$157.8 million. I would upgrade to bullish if gross margin stabilizes above 45% in Q2 2026 and revenue growth sustains above 10%, or downgrade to bearish if gross margin falls below 42% or the stock breaks below $12.41 on elevated volume. The risk/reward is skewed positively for patient investors with a 12-18 month horizon, but the lack of near-term catalysts and the persistent downtrend warrant a neutral stance until evidence of stabilization emerges.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Hayward Holdings, Inc.'s 12-month outlook, with a consensus price target around $16.50 and implied upside of +11.6% versus the current price.
Average Target
$16.50
0 analysts
Implied Upside
+11.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$13 - $20
Analyst target range
Seven analysts cover Hayward Holdings, with a consensus recommendation of "Buy" and an average target price of $17.93. This implies an upside of approximately 42.0% from the current price of $12.63, indicating that the analyst community remains bullish despite the stock's poor performance. The recommendation mean of 2.4 (on a scale where 1 is Strong Buy and 5 is Strong Sell) suggests a moderate buy consensus, with some analysts likely holding neutral views. The consensus EPS estimate of $1.44 for the coming year, if achieved, would represent a significant increase from trailing EPS, supporting the optimistic targets.
The target price range spans from a low of $15.00 to a high of $19.50, a spread of 30% around the average, which signals moderate uncertainty. The high target of $19.50 assumes a successful execution of margin expansion and revenue growth, potentially driven by new product launches or market share gains. The low target of $15.00, still 18.8% above the current price, implies that even the most cautious analyst sees upside, though it may reflect concerns about a slower recovery in pool demand. Recent institutional ratings show a mix of Buy and Neutral ratings, with B of A Securities reiterating a Buy in April 2026 and Stifel maintaining a Buy in February 2026, while Wolfe Research downgraded to Peer Perform in April 2025. The lack of recent downgrades and the presence of Buy ratings suggest that analyst sentiment, while cautious, is not bearish, and the wide target spread indicates that the market is awaiting clearer signs of a turnaround.
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Bulls vs Bears: HAYW Investment Factors
The bear case currently has stronger near-term evidence: the stock is in a sustained downtrend, down 23.41% over three months and sitting just 1.8% above its 52-week low, with gross margins compressing 637 basis points over three quarters. However, the bull case rests on forward-looking fundamentals that are more compelling than the price action suggests: a forward PE of 13.02, PEG of 0.81, debt-to-equity of 0.0083, and 42% analyst upside to a $17.93 average target. The single most important tension is whether the Q1 2026 revenue acceleration (+11.53% YoY) and margin stabilization can be sustained through the seasonally strong Q2 and Q3, or whether the gross margin decline reflects structural pricing pressure that will prevent the consensus EPS of $1.44 from being achieved. If earnings estimates hold, the stock is deeply undervalued; if they are cut, the current price may still be too high.
Bullish
- Analyst consensus sees 42% upside: Seven analysts cover HAYW with a consensus 'Buy' rating and an average target price of $17.93, implying 42.0% upside from the current $12.63. Even the lowest target of $15.00 represents 18.8% upside, suggesting the analyst community sees limited downside from current levels.
- Forward PE of 13x signals deep value: The forward PE of 13.02 is less than half the trailing PE of 22.07, implying the market expects EPS to more than double from $0.57 to the consensus estimate of $1.44. The PEG ratio of 0.81 (below 1.0) suggests the stock is undervalued relative to its expected earnings growth rate.
- Fortress balance sheet with minimal leverage: Debt-to-equity of just 0.0083 and a current ratio of 2.94 provide exceptional financial flexibility. With $135.8 million in cash and TTM free cash flow of $80.5 million, the company can fund growth initiatives and weather cyclical downturns without balance sheet stress.
- Revenue growth reaccelerated in Q1 2026: Q1 2026 revenue of $255.2 million grew 11.53% year-over-year from $228.8 million, marking a meaningful acceleration from the roughly flat full-year 2025 revenue of ~$1.1 billion. This suggests the residential pool market may be stabilizing after the post-pandemic demand digestion.
Bearish
- Severe relative underperformance vs. market: HAYW is down 13.14% over the past year while the S&P 500 gained 17.22%, a relative strength gap of -30.36%. The stock is down 19.91% YTD versus the S&P's 13.11% gain, and down 23.41% over three months, indicating persistent capital rotation out of the name.
- Trading near 52-week lows with no support: At $12.63, the stock sits just 1.8% above its 52-week low of $12.41 and 28.8% below its 52-week high of $17.73, placing it in the bottom 2% of its annual range. A breakdown below $12.41 would likely trigger further selling with no clear technical support.
- Gross margin compression over four quarters: Gross margin declined from 50.39% in Q2 2025 to 48.40% in Q3 2025 to 44.02% in Q1 2026, a 637 basis point contraction over three quarters. This trend suggests pricing pressure or rising input costs that could undermine the earnings recovery story.
- Negative free cash flow in Q1 2026: Free cash flow turned negative at -$157.8 million in Q1 2026 due to a large working capital build. While Q1 is seasonally weak, this swing from positive TTM FCF of $80.5 million raises questions about cash conversion and the sustainability of the earnings recovery.
HAYW Technical Analysis
Hayward Holdings is in a sustained downtrend, with the stock down 13.14% over the past year and 19.91% year-to-date, significantly underperforming the S&P 500's 17.22% gain over the same period. The current price of $12.63 sits just 1.8% above the 52-week low of $12.41 and 28.8% below the 52-week high of $17.73, placing it in the bottom 2% of its 52-week range. This positioning near the lows signals persistent selling pressure and a lack of near-term support, though it also raises the possibility of a value opportunity if fundamentals stabilize. The stock's relative strength versus the S&P 500 is deeply negative across all timeframes, with a 1-year relative strength of -30.36%, confirming that capital has been rotating out of this name.
Short-term momentum remains weak, with the stock down 13.02% over the past month and 23.41% over the past three months, accelerating the longer-term downtrend. The 1-month decline of 13.02% compares unfavorably to the S&P 500's 0.69% gain, resulting in a relative strength of -13.71% for the month. This divergence suggests that the selling pressure is intensifying rather than abating, and there is no evidence of a near-term bottom. The 6-month change of -4.54% is less severe than the 3-month decline, indicating that the most recent quarter has been particularly damaging, possibly due to disappointing earnings or guidance. Volume of 8.25 million shares is moderate, but without a capitulation spike, it is difficult to call a bottom.
Key technical levels are clear: support rests at the 52-week low of $12.41, just below the current price, while resistance is established at the 52-week high of $17.73. A breakdown below $12.41 would likely trigger further selling and open the door to new lows, while a breakout above $17.73 would require a significant catalyst to reverse the current trend. The stock's beta of 1.103 indicates it is slightly more volatile than the broader market, meaning investors should expect amplified moves in both directions. The maximum drawdown of -27.67% over the past year highlights the risk of holding this name during periods of market stress, and position sizing should account for this elevated volatility.
Beta
1.18
1.18x market volatility
Max Drawdown
-34.4%
Largest decline past year
52-Week Range
$11-$18
Price range past year
Annual Return
-3.5%
Cumulative gain past year
| Period | HAYW Return | S&P 500 |
|---|---|---|
| 1m | +18.1% | +0.9% |
| 3m | -3.8% | +4.1% |
| 6m | -1.7% | +7.2% |
| 1y | -3.5% | +12.4% |
| ytd | -6.2% | +13.3% |
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HAYW Fundamental Analysis
Hayward's revenue trajectory has been uneven, with the most recent quarter (Q1 2026) showing revenue of $255.2 million, up 11.53% year-over-year from $228.8 million in Q1 2025. However, this growth follows a sequential decline from Q4 2025's $349.4 million, reflecting the seasonal nature of the pool equipment business. The year-over-year improvement is encouraging, but the company's full-year 2025 revenue of approximately $1.1 billion was roughly flat compared to 2024, indicating that growth remains sluggish. The residential pool segment dominates with $223.8 million in revenue, while commercial pool and flow control contribute $17.9 million and $13.5 million respectively, highlighting the company's dependence on the residential aftermarket.
Profitability remains solid, with Q1 2026 net income of $23.4 million and a net margin of 13.51%, though this is down from the 19.58% net margin in Q4 2025. Gross margin in Q1 2026 was 44.02%, a decline from 48.40% in Q3 2025 and 50.39% in Q2 2025, suggesting some margin compression over the past year. The operating margin of 21.13% is healthy for an industrial manufacturer, but the downward trend in gross margin bears watching, as it could indicate pricing pressure or rising input costs. The company's EBITDA of $60.9 million in Q1 2026 represents a 23.86% EBITDA margin, which is respectable but below the 29.6% seen in Q4 2025.
The balance sheet is a bright spot, with a debt-to-equity ratio of just 0.0083, reflecting very low leverage and significant financial flexibility. The current ratio of 2.94 indicates strong liquidity, and the company has $135.8 million in cash as of Q1 2026. However, free cash flow turned negative in Q1 2026 at -$157.8 million, driven by a large working capital build, which is typical for the seasonally weak first quarter. Over the trailing twelve months, free cash flow was $80.5 million, and the return on equity of 9.51% is modest but positive. The company's ability to generate cash through the cycle will be critical to funding growth and potentially returning capital to shareholders.
Quarterly Revenue
$255216000.0B
2026-03
Revenue YoY Growth
+11.5%
YoY Comparison
Gross Margin
44.0%
Latest Quarter
Free Cash Flow
$80497000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HAYW Overvalued?
With positive net income of $23.4 million in the most recent quarter and a trailing PE ratio of 22.07, the PE ratio is the appropriate primary valuation metric. The forward PE of 13.02 is significantly lower than the trailing PE, implying that the market expects earnings to grow substantially over the next year, with consensus EPS estimates of $1.44 versus trailing EPS of $0.57. This gap suggests that analysts anticipate a strong earnings recovery, likely driven by margin expansion and revenue growth, but the market is currently pricing in a high degree of uncertainty given the stock's recent decline.
Compared to the broader industrials sector, Hayward's valuation appears mixed. The PS ratio of 2.98 and EV/EBITDA of 10.04 are relatively modest, but without a direct industry average from the provided data, we can infer that the stock is trading at a discount to its own historical multiples. The PEG ratio of 0.81, below 1.0, suggests that the stock may be undervalued relative to its expected growth rate, assuming the earnings estimates are achievable. However, the premium or discount to peers cannot be quantified precisely without sector averages, though the low debt-to-equity and strong liquidity position may justify a premium relative to more leveraged competitors.
Historically, Hayward's valuation has been volatile. The trailing PE ratio has ranged from a low of 12.07 in Q4 2025 to a high of 83.39 in Q1 2024, and the current 22.07 is near the middle of that range. The PS ratio of 2.98 is near the low end of its historical range, which has seen levels above 15 in 2024. This suggests that the market is currently pricing in pessimistic expectations, and if the company can deliver on its earnings growth, there could be room for multiple expansion. However, the low PS ratio could also reflect concerns about the sustainability of margins and growth in a challenging macroeconomic environment.
PE
22.1x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~64x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.0x
Enterprise Value Multiple
Investment Risk Disclosure
Hayward's financial risks are moderate but not negligible. The debt-to-equity ratio of 0.0083 is exceptionally low, and the current ratio of 2.94 provides strong liquidity, so solvency is not a concern. However, free cash flow turned negative at -$157.8 million in Q1 2026 due to a working capital build, and the TTM FCF of $80.5 million represents only a 2.4% FCF yield on the $3.35 billion market cap. More importantly, gross margin has compressed from 50.39% in Q2 2025 to 44.02% in Q1 2026, a 637 basis point decline that, if sustained, would pressure the consensus EPS estimate of $1.44 and undermine the forward PE of 13.02. The company's 87.7% revenue concentration in residential pools also means that any renewed weakness in discretionary consumer spending or pool construction activity would disproportionately impact results.
Market and competitive risks are significant given the stock's deep underperformance. HAYW has a beta of 1.103, meaning it is slightly more volatile than the broader market, and its 1-year relative strength of -30.36% versus the S&P 500 confirms that capital has been rotating out of the name. The stock trades at a trailing PE of 22.07, which is not obviously cheap on trailing earnings, though the forward PE of 13.02 and PEG of 0.81 suggest the market is pricing in a recovery. Competitive risks include potential share loss to peers like Pentair in the pool equipment market, particularly if Hayward's margin compression reflects pricing pressure rather than temporary input cost inflation. The absence of recent news in the dataset means there are no identifiable near-term catalysts, which could prolong the period of underperformance.
The worst-case scenario would involve a combination of continued gross margin erosion, a miss on the consensus EPS of $1.44, and a broader consumer discretionary slowdown that delays the residential pool recovery. In this scenario, the stock could retest its 52-week low of $12.41, representing a 1.8% decline from the current price of $12.63, or fall further to the analyst low target of $15.00 (which is actually above the current price, suggesting the analyst floor is not a downside scenario). A more realistic bear case would see the stock break below $12.41 and trade down to the $10-$11 range, implying a 13-21% loss from current levels. The maximum drawdown of -27.67% over the past year shows that investors have already experienced significant pain, and a repeat of that magnitude from current levels would take the stock to approximately $9.14.
FAQ
The most severe risk is continued gross margin compression, which has already fallen 637 basis points from 50.39% in Q2 2025 to 44.02% in Q1 2026; if this trend continues below 42%, the consensus EPS estimate of $1.44 would be at risk and the forward PE of 13.02 would no longer look cheap. The second major risk is the persistent downtrend, with the stock down 23.41% over three months and sitting just 1.8% above its 52-week low of $12.41; a breakdown below this level could trigger momentum-driven selling toward $10-$11. The third risk is the company's 87.7% revenue concentration in residential pools, which makes it highly sensitive to consumer discretionary spending and interest rates. Finally, the negative free cash flow of -$157.8 million in Q1 2026, while seasonal, raises questions about cash conversion and the sustainability of the earnings recovery. These risks are ranked in order of severity, with margin compression being the most immediate threat to the investment thesis.
The 12-month forecast has three scenarios: a base case with 50% probability targeting $15.00-$17.93, a bull case with 25% probability targeting $17.93-$19.50, and a bear case with 25% probability targeting $12.41-$15.00. The base case assumes Hayward meets the consensus EPS estimate of $1.44 and revenue of $1.495 billion, with gross margin stabilizing in the 44-46% range, allowing the stock to re-rate toward the analyst average target of $17.93. The bull case requires gross margin recovery above 46% and successful new product launches, driving the stock toward the analyst high target of $19.50. The bear case assumes continued margin compression below 44%, an EPS miss, and a breakdown below the 52-week low of $12.41. The most likely scenario is the base case, with the key assumption being that gross margin stabilizes after the Q1 2026 trough of 44.02%.
HAYW appears undervalued on forward-looking metrics but fairly valued on trailing earnings. The forward PE of 13.02 is less than half the trailing PE of 22.07, implying the market expects EPS to more than double from $0.57 to $1.44. The PEG ratio of 0.81 is below 1.0, suggesting the stock is cheap relative to its expected growth rate, and the PS ratio of 2.98 is near the low end of its historical range, which saw levels above 15 in 2024. The EV/EBITDA of 10.04 is modest for an industrial manufacturer with a 23.86% EBITDA margin. However, the trailing PE of 22.07 is not obviously cheap, and the market is clearly pricing in a high degree of uncertainty given the stock's 23.41% three-month decline. The valuation implies the market expects the earnings recovery to materialize but is not willing to pay for it until there is evidence of margin stabilization.
From a risk/reward perspective, HAYW offers a compelling but speculative opportunity. The stock trades at $12.63, just 1.8% above its 52-week low of $12.41, with 42% upside to the analyst average target of $17.93 and 18.8% upside even to the lowest target of $15.00. The forward PE of 13.02 and PEG of 0.81 suggest the stock is undervalued relative to expected earnings growth, while the debt-to-equity of 0.0083 and current ratio of 2.94 provide a strong financial foundation. However, the biggest downside risk is a breakdown below $12.41, which could take the stock to $10-$11, representing a 13-21% loss. It is a good buy for patient, risk-tolerant investors with a 12-18 month horizon who believe the earnings recovery to $1.44 EPS is achievable, but it is not suitable for short-term traders or conservative investors given the 23.41% three-month decline and lack of near-term catalysts.
HAYW is better suited for long-term investment with a minimum holding period of 12-18 months, given the company's growth stage, volatility, and earnings visibility. The stock has a beta of 1.103, meaning it is slightly more volatile than the market, and a maximum drawdown of -27.67% over the past year, which makes it unsuitable for short-term trading unless one is a momentum trader. The company pays no dividend (0% yield), so there is no income component to support a shorter holding period. The earnings recovery story, with consensus EPS of $1.44 versus trailing EPS of $0.57, requires time to materialize, and the lack of near-term catalysts means the stock could remain range-bound for several quarters. A 12-18 month horizon allows time for gross margin stabilization, revenue growth to sustain above 10%, and the market to recognize the value implied by the forward PE of 13.02 and PEG of 0.81.