• If you are wondering whether Hayward Holdings' current share price lines up with its underlying value, you are not alone. This article is built to help you frame that question clearly.
• The stock last closed at US$15.50, with returns of 3.4% over the past week, a 3.7% decline over the past month, and year to date and 1 year returns of a 1.7% decline and 5.9% respectively, while the 3 year return sits at 28.7%.
• Recent news flow has largely focused on Hayward Holdings as an established player in pool equipment and related products, with investors watching how demand trends and capital allocation decisions shape sentiment around the stock. This background helps explain why the share price can move even when there is no single headline event driving it.
• Our valuation model currently gives Hayward Holdings a value score of 3 out of 6, meaning it screens as undervalued on half of our checks. Next we will look at how different valuation approaches arrive at that score, before finishing with a more holistic way to think about valuation overall.

Find out why Hayward Holdings's 5.9% return over the last year is lagging behind its peers.

Approach 1: Hayward Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash Hayward Holdings could generate in the future and discounts those back to today, to get an implied value per share in today’s dollars.

For Hayward Holdings, the model uses a 2 Stage Free Cash Flow to Equity approach based on projected Free Cash Flow. The latest twelve month Free Cash Flow is about $224.3 million. Analyst input and subsequent extrapolations suggest Free Cash Flow around $218.2 million in 2026 and $226 million in 2028, with further estimates extending out to 2035 as provided by Simply Wall St.

Pulling all of those projected cash flows together, the DCF model arrives at an estimated intrinsic value of about $16.22 per share. Compared with the recent share price of $15.50, this implies the stock screens as around 4.4% undervalued. This is a relatively small gap and well within the kind of range that can move around as assumptions change.

Result: ABOUT RIGHT

Hayward Holdings is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hayward Holdings.

Approach 2: Hayward Holdings Price vs Earnings

For profitable companies, the P/E ratio is a useful shorthand because it tells you how much you are paying today for each dollar of current earnings. Higher growth potential and lower perceived risk usually justify a higher P/E, while slower growth or higher risk tend to pull a fair P/E lower.

Hayward Holdings currently trades on a P/E of 22.21x. That is close to the Building industry average P/E of about 22.33x, but below the broader peer group average of 39.02x. On its own, that might suggest the stock is priced roughly in line with its sector, while sitting at a discount to peers.

Simply Wall St’s Fair Ratio metric estimates what a reasonable P/E could be after factoring in Hayward Holdings’ earnings growth profile, industry, profit margins, market cap and company specific risks. Because it is tailored to the company, it offers a more targeted reference point than a simple comparison with sector or peer averages. The Fair Ratio for Hayward Holdings is 20.64x, which is slightly below the current 22.21x P/E, indicating the shares screen as modestly overvalued on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Hayward Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your story about Hayward Holdings connected to your own assumptions for future revenue, earnings and margins. These are turned into a forecast and a fair value that you can compare with the current price in an easy tool on Simply Wall St’s Community page, where millions of investors share views that update as new information like news or earnings arrives. For example, one investor might see Hayward’s connected and eco focused products, margin assumptions near 14.9%, a future P/E around 26.20x and a fair value of about US$18 per share as a reason to see more upside. Another might focus on its reliance on the residential aftermarket and potential demand constraints, and use a lower growth or margin path to reach a much lower fair value. This can give you a clear way to decide whether the current price looks high or low relative to the story you believe.

Do you think there's more to the story for Hayward Holdings? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.