Hayward Holdings, Inc.

Leading pool-equipment maker with high-margin, recurring aftermarket revenue and strong cash generation.

Strengths

• Operating margin 20.8% (88th pct), net margin 13.5% (79th pct), FCF margin 20.3% (83rd pct), ROA 4.8% (78th pct)
• ~33% NA residential share with ~85% recurring aftermarket sales and an installed-base moat

Risks

• ROE only 9.5% (59th pct) and customer concentration (top two ~45% of sales)
• Seasonal, discretionary demand plus tariff/commodity and FX exposure in E&RW

Notable findings

• Customer concentration~85% of revenue from one customer/distributor — Aftermarket replacements and 2 upgrades to higher value Internet of Things (“IoT”) and energy-efficient models are a primary growth driver for our business, as aftermarket sales have represented
• Strong balance sheetStrong balance sheet — $399M cash & investments
• Buying back stockNet buyback — share count -45%/yr over 4y
• Revenue declineRevenue -27.0% YoY