Hayward Holdings: A Re-Rating Play in the Pool Equipment Sector

The recent reiteration of a “Buy” rating by Stifel on Hayward Holdings, Inc. (NYSE: HAYW) with a $18 price targetStifel Reiterates ‘Buy’ Rating on Hayward Holdings, Inc. (HAYW)^[1] has reignited investor interest in the pool equipment specialist. With the stock trading at a 13.53% discount to the analyst consensus price targetStifel reiterates Buy rating on Hayward Holdings stock, maintains …^[2], the case for a re-rating hinges on Hayward's ability to capitalize on structural trends in outdoor living, its robust margin profile, and a strategic pivot toward innovation and domestic manufacturing.

Strategic Catalysts for Near-Term Upside

Hayward's re-rating potential is anchored in three key drivers. First, the company's pricing power and margin resilience stand out in a sector grappling with post-pandemic demand normalization. Q2 2025 results revealed a record 52.7% gross profit marginHayward Holdings Inc (HAYW) Q2 2025 Earnings Call Highlights^[3], outpacing the industry average and underscoring its ability to absorb input cost pressures. Stifel highlighted this as a critical differentiator, noting that Hayward's margin structure—bolstered by a 2.84 current ratioStifel reiterates Buy rating on Hayward Holdings stock, maintains …^[4]—positions it to outperform peers during cyclical downturns.

Second, strategic investments in innovation are unlocking new revenue streams. The launch of OmniX, a decentralized automation platform, targets a $1.2 billion U.S. pool automation marketGrowth Strategy and Future Prospects of Hayward^[5], while R&D spending on sustainable technologies (e.g., energy-efficient heat pumps) aligns with regulatory tailwinds and consumer demand for eco-friendly solutionsDecoding Hayward Holdings Inc (HAYW): A Strategic SWOT …^[6]. These initiatives not only defend market share but also create barriers to entry for competitors.

Third, supply chain optimization is mitigating the drag from tariffs. By shifting production from China to the U.S., Hayward aims to reduce its $30 million annualized tariff burdenHayward Holdings, Inc. (HAYW) Q2 2025 Earnings Call Highlights^[7] and improve delivery timelines. This pivot, combined with a 33% North American market shareHayward Holdings, Inc. (NYSE:HAYW) Stock Valuation, Peer …^[8], strengthens its competitive moat against rivals like Pentair and Fluidra.

Valuation Attractiveness: A Tale of Two Metrics

Hayward's valuation appears mixed at first glance. A trailing P/E of 24.87 and PEG ratio of 2.04Hayward Holdings (HAYW) Statistics & Valuation - Stock Analysis^[9] suggest the stock is overvalued relative to earnings growth. However, this overlooks its EV/EBITDA of 13.81, which is in line with Fluidra's 13.84Fluidra (BME:FDR) Statistics & Valuation Metrics - Stock Analysis^[10] and significantly lower than Pentair's 18.46Pentair (PNR) Statistics & Valuation - Stock Analysis^[11]. This discrepancy reflects Hayward's superior EBITDA margins (29.5% in Q2 2025Hayward Holdings Inc (HAYW) Q2 2025 Earnings Call Highlights^[12]) and disciplined capital structure, with a net leverage ratio of 2.1xHayward Holdings, Inc. (HAYW) Q2 2025 Earnings Call Highlights^[13].

Moreover, the stock's 13.53% upside potentialStifel reiterates Buy rating on Hayward Holdings stock, maintains …^[14] is supported by institutional buying and a favorable analyst outlook. Stifel's upgrade from Hold to Buy in February 2025Stifel Upgrades Hayward Holdings (HAYW) - Nasdaq^[15] coincided with increased holdings from institutions like JPMorgan ChaseStifel reiterates Buy rating on Hayward Holdings stock, maintains …^[16], signaling confidence in management's execution.

Strategic Positioning in a Fragmented Market

Hayward's dominance in the residential pool equipment segment is underpinned by its 33% North American market shareDecoding Hayward Holdings Inc (HAYW): A Strategic SWOT …^[17] and a diversified product portfolio spanning pumps, filters, and smart automation. While competitors like Pentair (P/E of 23.62Pentair (PNR) Statistics & Valuation - Stock Analysis^[18]) and Fluidra (P/E of 27.83Fluidra (BME:FDR) Statistics & Valuation Metrics - Stock Analysis^[19]) offer similar products, Hayward's focus on digital transformation—via IoT-enabled devices and mobile apps—creates a unique value proposition.

The company's expansion into the commercial segment via acquisitions like ChlorKingDecoding Hayward Holdings Inc (HAYW): A Strategic SWOT …^[20] further broadens its addressable market. This diversification is critical as the residential pool market faces cyclical headwinds, with new construction expected to recover modestly in 2026Stifel reiterates Buy rating on Hayward Holdings stock, maintains …^[21].

Risks and Mitigants

Hayward is not without risks. Tariffs and global supply chain disruptions could pressure margins, while competition from Pentair and Fluidra remains intense. However, the company's strong balance sheet, pricing power, and innovation pipeline mitigate these risks. Stifel's projection of mid-single-digit revenue growth for 2026Stifel reiterates Buy rating on Hayward Holdings stock, maintains …^[22] assumes a gradual normalization of the pool category, a scenario that favors Hayward's long-term positioning.

Conclusion: A Conviction-Building Opportunity

Hayward Holdings presents a compelling case for a re-rating, driven by margin resilience, strategic innovation, and favorable valuation metrics relative to peers. While the PEG ratio suggests caution, the company's ability to navigate macroeconomic headwinds and capitalize on outdoor living trends makes it a standout in a fragmented industry. For investors seeking exposure to a high-margin, innovation-led business with clear catalysts, HAYW offers an attractive entry point ahead of its projected $18 price target.