Value
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.0 |
| P/S | 9.4 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 7.5 |
| PEG | 1.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 16.4x
- ▸PEG: 7.79
POOL · Why this verdict
Why Pool (POOL) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Pool Corporation carries an excellent 34% return on equity and beats earnings in 3 of 4 quarters, but a death cross in place, a put-to-call ratio of 4.53, and heavy geographic concentration in four states combine with flat top-line growth to make this a hold-only situation with meaningful near-term downside risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Pool Corporation generates a 34% return on equity, which ranks it above peers, and has beaten consensus EPS estimates in 3 of the last 4 quarters, demonstrating that the distribution business model converts capital efficiently even during periods of weaker demand. Quality breakdown | Return on equity remains above 25% and the company beats consensus EPS in at least 3 of the next 4 quarters. | →Stable |
| CounterReturn on equity can be inflated by leverage; Pool carries a debt-to-equity ratio of 1.4 and free cash flow represents only 55% of net income, raising questions about earnings quality. | ||
A death cross is in effect with the 200-day moving average slope declining at negative 7.2% per 30 days and on-balance volume falling, confirming that selling pressure has outpaced buying interest over the near term. Momentum breakdown | The stock reclaims and holds above its 200-day moving average for at least 30 consecutive calendar days within the next 6 months. | ↓Deteriorating |
| CounterRSI of 60 and an improving MACD suggest that momentum may be turning; the death cross is a lagging indicator and may not predict further downside from current levels. | ||
53% of revenue is concentrated in four states — California, Florida, Texas, and Arizona — meaning regional weather anomalies, housing market downturns, or regulatory changes in those markets can disproportionately affect the business. Bear case | Top-four-state revenue concentration falls below 50% as management expands into new geographies over the next 12 months. | ↓Deteriorating |
| CounterThese four states represent the country's largest swimming pool markets by installed base, and concentration reflects rational market focus rather than a strategic failure. | ||
The put-to-call ratio stands at 4.53 and implied volatility is elevated at 74%, indicating that options market participants have a strongly negative near-term view that adds meaningful overhang to any recovery rally. Key risks | The put-to-call ratio falls below 2.0 within the next 3 months, reflecting a reduction in bearish options positioning. | ↓Deteriorating |
| CounterA very high put-to-call ratio in a stock with strong long-term fundamentals can signal a contrarian buying opportunity, as maximum pessimism often precedes turning points. | ||
Pool Corporation generates a 34% return on equity, which ranks it above peers, and has beaten consensus EPS estimates in 3 of the last 4 quarters, demonstrating that the distribution business model converts capital efficiently even during periods of weaker demand.
→StableQuality breakdown
- Expectation
- Return on equity remains above 25% and the company beats consensus EPS in at least 3 of the next 4 quarters.
CounterReturn on equity can be inflated by leverage; Pool carries a debt-to-equity ratio of 1.4 and free cash flow represents only 55% of net income, raising questions about earnings quality.
A death cross is in effect with the 200-day moving average slope declining at negative 7.2% per 30 days and on-balance volume falling, confirming that selling pressure has outpaced buying interest over the near term.
↓DeterioratingMomentum breakdown
- Expectation
- The stock reclaims and holds above its 200-day moving average for at least 30 consecutive calendar days within the next 6 months.
CounterRSI of 60 and an improving MACD suggest that momentum may be turning; the death cross is a lagging indicator and may not predict further downside from current levels.
53% of revenue is concentrated in four states — California, Florida, Texas, and Arizona — meaning regional weather anomalies, housing market downturns, or regulatory changes in those markets can disproportionately affect the business.
↓DeterioratingBear case
- Expectation
- Top-four-state revenue concentration falls below 50% as management expands into new geographies over the next 12 months.
CounterThese four states represent the country's largest swimming pool markets by installed base, and concentration reflects rational market focus rather than a strategic failure.
The put-to-call ratio stands at 4.53 and implied volatility is elevated at 74%, indicating that options market participants have a strongly negative near-term view that adds meaningful overhang to any recovery rally.
↓DeterioratingKey risks
- Expectation
- The put-to-call ratio falls below 2.0 within the next 3 months, reflecting a reduction in bearish options positioning.
CounterA very high put-to-call ratio in a stock with strong long-term fundamentals can signal a contrarian buying opportunity, as maximum pessimism often precedes turning points.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.3 |
| Gross margin | 1.9 |
| Op margin | 2.9 |
| Net margin | 3.8 |
| Current ratio | 6.6 |
| FCF quality | 4.3 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 34%
- ▸Earnings quality warning: 55% FCF/NI
- ▸No competitive moat
Growth
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 2.4 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 3.0 |
| Volume | 6.6 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -6.7%/30d — confirmed downtrend
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 2.2 |
| Analyst rating | 7.0 |
| Price target | 8.5 |
- ▸LLM news sentiment: -0.55 (n=1)
- ▸Analyst upside: 29%
Insider
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 8.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider buying — $4,042,726 (0.056% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.3 |
| quality rank | 8.1 |
| growth rank | 3.9 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.7 |
| support resistance | 9.0 |
| 52w position | 1.6 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.9 |
| days to cover | 7.9 |
| volatility | 2.3 |
| put call | 4.5 |
| implied vol | 4.8 |
| beta | 6.8 |
| debt equity | 4.2 |
| news risk | 6.0 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 1.6 |
| dividend safety | 6.5 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 0 days
How the verdict was assembled
Engine trigger
Earnings in 0 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:2.8<4.5
- ASYMMETRY:1.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.45
Upside
+11.9%
Downside
8.2%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -42% (>40% off 52w high)
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 0 days. Wait until post-earnings. The 10-dimension scores remain Insider at 7.9 (strongest), but MOMENTUM:2.8<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.9, Technical at 6.8, and Sentiment at 5.9; the weakest are Momentum at 2.8, Growth at 3.2, and Peer rank at 4.8. The V9 engine flagged 4 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.45 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Roe Peer Quality
Trip ifReturn on equity falls below 20% in any reported annual period over the next 12 months.
- P2Death Cross And Weak Momentum
Trip ifThe 200-day moving average slope remains below negative 5% per 30 days for more than 5 consecutive months.
- P3Geographic Concentration Risk
Trip ifRevenue from the four concentrated states rises above 58% of total revenue in any reported period.
- P4Extreme Bearish Options Positioning
Trip ifThe put-to-call ratio rises above 6.0 at any point over the next 3 months.