As of June 13, 2025, Latham Group Inc's estimated intrinsic value ranges from $2.10 to $12.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $12.01 | +101.5% |
| Discounted Cash Flow (5Y) | $7.46 | +25.2% |
| Dividend Discount Model (Multi-Stage) | $6.35 | +6.5% |
| Earnings Power Value | $2.10 | -64.8% |
Is Latham Group Inc (SWIM) undervalued or overvalued?
With the current market price at $5.96, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Latham Group Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.9 | 0.96 |
| Cost of equity | 8.0% | 10.3% |
| Cost of debt | 7.2% | 20.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.42 | 0.42 |
| After-tax WACC | 7.2% | 11.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $7 | $1,154M | 80.6% |
| 10-Year Growth | $12 | $1,684M | 67.0% |
| 5-Year EBITDA | $8 | $1,206M | 81.5% |
| 10-Year EBITDA | $12 | $1,686M | 67.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $47M |
| Discount Rate (WACC) | 11.7% - 7.2% |
| Enterprise Value | $403M - $657M |
| Net Debt | $286M |
| Equity Value | $117M - $371M |
| Outstanding Shares | 116M |
| Fair Value | $1 - $3 |
| Selected Fair Value | $2.10 |
| Metric | Value |
|---|---|
| Market Capitalization | $694M |
| Enterprise Value | $980M |
| Trailing P/E | 0.00 |
| Forward P/E | 96.30 |
| Trailing EV/EBITDA | 11.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.42 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $3.60 |
| Discounted Cash Flow (5Y) | 29% | $1.86 |
| Dividend Discount Model (Multi-Stage) | 24% | $1.27 |
| Earnings Power Value | 12% | $0.21 |
| Weighted Average | 100% | $8.17 |
Based on our comprehensive valuation analysis, Latham Group Inc's weighted average intrinsic value is $8.17, which is approximately 37.1% above the current market price of $5.96.
Key investment considerations:
Given these factors, we believe Latham Group Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.