Bailey Pemberton
4 min read
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Hayward Holdings stock has lagged over the past five years, yet both a Discounted Cash Flow (DCF) intrinsic value estimate and earnings multiples currently point to the shares trading at a discount to what the underlying cash flows may justify.
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Hayward Holdings has declined about 40.1% over the last five years, which sets expectations low and puts more focus on whether the current price already reflects that weaker long term return.
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On the positive side, Stifel has reiterated a Buy rating supported by improved permit data. The company’s sizeable term loan and revolving credit facilities mean leverage and refinancing terms remain an ongoing consideration for valuation.
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The stock screens as undervalued both on a Discounted Cash Flow (DCF) view, with an intrinsic value estimate about 14.8% above the market price, and on earnings multiples. It scores a mixed 4 out of 6 on broader valuation checks, pointing to a discount but not an across the board bargain.
The issue now is whether Hayward Holdings’ current discount to intrinsic value can be justified by its risks and recent track record, or if the market is being overly cautious at today’s price.
Find out why Hayward Holdings’ -4.4% return over the last year is lagging behind its peers.
Does Hayward Holdings Look Undervalued on Cash Flow?
The Discounted Cash Flow (DCF) model estimates what Hayward Holdings might be worth based on the cash it can generate for shareholders over time. For Hayward Holdings, the model starts with latest twelve month free cash flow of about $78.8 million and assumes that cash flows continue growing from this base rather than shrinking, which supports a 2 Stage Free Cash Flow to Equity setup.
On these inputs, the DCF points to an estimated intrinsic value of about $16.95 per share, which sits roughly 14.8% above the current market price, so the stock appears undervalued on this basis. Stifel’s reiterated Buy rating and higher permit data help explain why investors are watching the stock more closely, yet the market price still sits below what this cash flow forecast suggests.
Overall, the DCF workup indicates Hayward Holdings stock appears undervalued relative to the cash flows currently modeled.
Our Discounted Cash Flow (DCF) analysis suggests Hayward Holdings is undervalued by 14.8%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks.
