Hayward Holdings Fair Value Estimate: US$11.47, 35% Overvalued

Hayward Holdings' fair value estimate is $11.47 using the 2-stage free cash flow to equity model. The company's current share price of $15.43 suggests it may be 35% overvalued. The analyst price target of $16.07 is 29% higher than the estimated fair value.

Hayward Holdings Inc. (HAYW) reported robust earnings for the second quarter of 2025, with earnings per share (EPS) of $0.24, surpassing the forecast of $0.23. Revenue also exceeded expectations, reaching $299.6 million compared to the forecast of $290.49 million. The stock price rose by 3.61% in pre-market trading following the positive earnings report [1].

Key Takeaways
- Hayward Holdings exceeded both EPS and revenue forecasts for Q2 2025.
- The stock price increased by 3.61% following the positive earnings report.
- Record gross profit margin and improved EBITDA margins were reported.
- Strategic innovations and market share gains were highlighted.
- New pool construction is expected to decline, posing a future challenge.

Financial Highlights
- Revenue: $299.6 million, a 5% increase year-over-year.
- Earnings per share: $0.24, a 14% increase year-over-year.
- Gross profit margin: 52.7%, an increase of 170 basis points year-over-year.
- Adjusted EBITDA: $88 million, a 7% increase year-over-year.
- Adjusted EBITDA margin: 29.5%, up by 50 basis points year-over-year.

Earnings vs. Forecast
- Hayward Holdings exceeded expectations with an EPS of $0.24 compared to the forecast of $0.23, resulting in a 4.35% positive surprise.
- Revenue also surpassed projections, with a 3.14% surprise at $299.6 million versus the expected $290.49 million.

Market Reaction
Following the earnings announcement, Hayward Holdings’ stock experienced a 3.61% increase in pre-market trading, reaching $15.21. This positive movement indicates investor confidence in the company’s financial health and strategic initiatives. The stock’s performance is notable, with a beta of 1.12 and an Altman Z-Score of 4.58, suggesting financial stability. According to InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, though it maintains strong fundamentals and growth potential [1].

Outlook & Guidance
For the full year 2025, Hayward Holdings has provided net sales guidance between $1,070 million and $1,100 million, reflecting a 2-5% increase. The company anticipates an adjusted EBITDA of $280-$290 million and expects a positive net price contribution of at least 4%. These projections underscore Hayward’s confidence in its strategic direction and market positioning [1].

Executive Commentary
CEO Kevin Holleran expressed confidence in the company’s execution capabilities, stating, "We are confident in our ability to successfully execute in a dynamic environment." Holleran also highlighted the focus on mitigation action plans and a healthy pipeline of opportunities, reinforcing the company’s growth prospects [1].

Risks and Challenges
Decline in new pool construction could impact future sales. Reduction in direct sourcing from China may pose supply chain challenges. Macroeconomic pressures could affect consumer spending and market demand [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-hayward-holdings-beats-q2-2025-expectations-93CH-4160724