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Pool Corp (POOL) Stock Outpaces Industry In a Year: Here's Why
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Pool Corporation (POOL - Free Report) is poised to benefit from the solid base business, pent-up demand and remodeling and replacement activities. This and a focus on acquisitions in new locations bode well.
In the past year, shares of Pool Corp have declined 9.9% compared with the industry’s 57.5% fall. The price performance was backed by solid earnings surprise history. Pool Corp’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters. Earnings estimates for 2022 and 2023 have moved up 4.4% and 4.1%, respectively, in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors Driving Growth
Solid Base Business: The company is benefitting from the solid performance of its base business segment. In first-quarter 2022, the company’s Base Business segment contributed 94% to total revenues. During the quarter, revenues from Base Business increased 25.6% year over year to $1,328.1 million. Elevated demand for outdoor living products benefitted the company. The segment's operating margins increased 430 basis points year over year, backed by its supply-chain management initiatives.
Image Source: Zacks Investment Research
Focus on Remodeling & Replacement Activities: Pool Corp continues to benefit from remodeling and replacement activities. During first-quarter 2022, building materials sales increased 29% year over year. The company is benefitting from strong demand in construction and remodel markets. Equipment and chemical sales increased 18% and 58% year over year, respectively, in the first quarter. The upside was primarily driven by solid demand for heaters, pumps, filters, lighting and automation. Chemical sales were primarily driven by solid demand and improved supply. The company believes that the flexibility of the new work-from-home norm is likely to act as a catalyst for investments in home improvements. Benefits from new products (such as automation and the connected pool) and strengthening of the southern migration are likely.
Acquisition Efforts: Pool Corp continues to focus on acquisition efforts to drive growth. The company closed the acquisition of Porpoise Pool & Patio in December 2021. The acquisition comprises three businesses, including a distributor of swimming pool products, a chemical packaging operation and a franchisor of swimming pool retail stores with a coverage of 232 stores throughout Florida and 30 stores from franchise locations in Alabama, Georgia, Louisiana and Texas. The company remains optimistic as the acquisition paves the path for penetration into the important DIY pool maintenance customer sector featuring recurring revenue maintenance products for the growing installed base of swimming pools. Backed by its distribution network coupled with operational synergies, the company anticipates that the Porpoise Pool & Patio business will contribute approximately 5% to POOLCORP’s total revenues in 2022. The acquisitions and the new locations are likely to boost customer relationships and services, thereby enhancing the top line.
During first-quarter 2022, the company boosted its presence in the DIY segment of the market with the acquisition of Pinch A Penny. During the quarter, POOL opened two new franchise locations. The company stated that it initiated work on chemical sourcing and product management and that it is reporting brisk store traffic and solid demand across the platform. Given the synergies coupled with its robust development pipeline, the company expects the initiative to drive growth in the upcoming period. Going forward, the company anticipates acquisitions in new locations to contribute 5-6% to POOLCORP’s revenue growth in 2022.
Upbeat Views: Given the company’s ability to drive organic growth and manage cost structure through execution and capacity creation, the company raised its guidance for 2022. The company anticipates its 2022 earnings per share in the range of $18.34-$19.09, up from the prior estimate of $17.19-$17.94. Also, it anticipates sales to be in line with the high end of the previous net sales guidance of 17-19%. The company anticipates positive demand trends to continue in 2022.
Civeo sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have increased 58.3% in the past year.
The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (EPS) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.
Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 25.3% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.
Funko sports a Zacks Rank #1. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 21.4% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.
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Pool Corp (POOL) Stock Outpaces Industry In a Year: Here's Why
Pool Corporation (POOL - Free Report) is poised to benefit from the solid base business, pent-up demand and remodeling and replacement activities. This and a focus on acquisitions in new locations bode well.
In the past year, shares of Pool Corp have declined 9.9% compared with the industry’s 57.5% fall. The price performance was backed by solid earnings surprise history. Pool Corp’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters. Earnings estimates for 2022 and 2023 have moved up 4.4% and 4.1%, respectively, in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors Driving Growth
Solid Base Business: The company is benefitting from the solid performance of its base business segment. In first-quarter 2022, the company’s Base Business segment contributed 94% to total revenues. During the quarter, revenues from Base Business increased 25.6% year over year to $1,328.1 million. Elevated demand for outdoor living products benefitted the company. The segment's operating margins increased 430 basis points year over year, backed by its supply-chain management initiatives.
Image Source: Zacks Investment Research
Focus on Remodeling & Replacement Activities: Pool Corp continues to benefit from remodeling and replacement activities. During first-quarter 2022, building materials sales increased 29% year over year. The company is benefitting from strong demand in construction and remodel markets. Equipment and chemical sales increased 18% and 58% year over year, respectively, in the first quarter. The upside was primarily driven by solid demand for heaters, pumps, filters, lighting and automation. Chemical sales were primarily driven by solid demand and improved supply. The company believes that the flexibility of the new work-from-home norm is likely to act as a catalyst for investments in home improvements. Benefits from new products (such as automation and the connected pool) and strengthening of the southern migration are likely.
Acquisition Efforts: Pool Corp continues to focus on acquisition efforts to drive growth. The company closed the acquisition of Porpoise Pool & Patio in December 2021. The acquisition comprises three businesses, including a distributor of swimming pool products, a chemical packaging operation and a franchisor of swimming pool retail stores with a coverage of 232 stores throughout Florida and 30 stores from franchise locations in Alabama, Georgia, Louisiana and Texas. The company remains optimistic as the acquisition paves the path for penetration into the important DIY pool maintenance customer sector featuring recurring revenue maintenance products for the growing installed base of swimming pools. Backed by its distribution network coupled with operational synergies, the company anticipates that the Porpoise Pool & Patio business will contribute approximately 5% to POOLCORP’s total revenues in 2022. The acquisitions and the new locations are likely to boost customer relationships and services, thereby enhancing the top line.
During first-quarter 2022, the company boosted its presence in the DIY segment of the market with the acquisition of Pinch A Penny. During the quarter, POOL opened two new franchise locations. The company stated that it initiated work on chemical sourcing and product management and that it is reporting brisk store traffic and solid demand across the platform. Given the synergies coupled with its robust development pipeline, the company expects the initiative to drive growth in the upcoming period. Going forward, the company anticipates acquisitions in new locations to contribute 5-6% to POOLCORP’s revenue growth in 2022.
Upbeat Views: Given the company’s ability to drive organic growth and manage cost structure through execution and capacity creation, the company raised its guidance for 2022. The company anticipates its 2022 earnings per share in the range of $18.34-$19.09, up from the prior estimate of $17.19-$17.94. Also, it anticipates sales to be in line with the high end of the previous net sales guidance of 17-19%. The company anticipates positive demand trends to continue in 2022.
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Civeo Corporation (CVEO - Free Report) , Bluegreen Vacations Holding Corporation and Funko, Inc. (FNKO - Free Report) .
Civeo sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have increased 58.3% in the past year.
The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (EPS) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.
Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 25.3% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.
Funko sports a Zacks Rank #1. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 21.4% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.