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Pool Corp. (POOL) Gains But Lags Market: What You Should Know

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Pool Corp. (POOL - Free Report) closed the most recent trading day at $356.94, moving +1.11% from the previous trading session. This change lagged the S&P 500's 3.06% gain on the day. Meanwhile, the Dow gained 2.68%, and the Nasdaq, a tech-heavy index, lost 0.09%.

Heading into today, shares of the distributor of supplies for swimming pools had lost 11.93% over the past month, lagging the Consumer Discretionary sector's loss of 6.59% and the S&P 500's loss of 4.31% in that time.

Investors will be hoping for strength from Pool Corp. as it approaches its next earnings release. On that day, Pool Corp. is projected to report earnings of $7.40 per share, which would represent year-over-year growth of 16.17%. Meanwhile, our latest consensus estimate is calling for revenue of $2.12 billion, up 18.76% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $18.50 per share and revenue of $6.33 billion. These totals would mark changes of +21.87% and +19.49%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Pool Corp.These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Pool Corp. is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Pool Corp.'s current valuation metrics, including its Forward P/E ratio of 19.09. For comparison, its industry has an average Forward P/E of 7.57, which means Pool Corp. is trading at a premium to the group.

We can also see that POOL currently has a PEG ratio of 1.91. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Leisure and Recreation Products stocks are, on average, holding a PEG ratio of 0.95 based on yesterday's closing prices.

The Leisure and Recreation Products industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 70, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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