* Note: Prices are in Million (M) USD.
Description:
Pool Corporation is a major distributor of swimming pool supplies, equipment, and related outdoor products.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $84 M
Debt : $1,553 M
EBITDA : $635 M
Net Debt (Debt - Cash): $1,470 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Consumer cyclical
Industry: Leisure
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 27.69
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $201 M
Average Revenue: $2,929 M
Revenue Converted To Free Cash Flow (%): 6.9%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $5,311 M
Revenue 4 Years Ago (2020-12-31): $3,937 M
Last 5 Years Average Revenue Growth: 7%
Since Revenue Growth is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $38 M
Share Count 5 Years Ago (2020-12-31): $41 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $11.75
Trailing 12-Month Earnings Per Share (EPS): $10.69
Average Earnings Per Share (EPS): $11.22
Dividend Per Share (DPS): $5
Payout Ratio: 43%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 45.7%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $311
52-Week Low: $281
Threshold Price (15% Above 52-Week Low): $323
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $12,007 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 26 points to above Pool Corporation (POOL) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
46.54 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (25.90)
× EPS ($11.22) = $290.66.
Last 20 Years Avg PE 25.9, Fair Value PE 15, Industry Based PE 15, Growth Based PE 6, RCFC Based PE 15.5, ROE Based PE 46.54, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 20.15. Value-Trades has assined P/E value 20.15. Since an average (Current Year EPS + Next Year EPS) earning per share is $11.22235.
The fair value of Pool Corporation (POOL) stock should be (20.15 x $11.22235) = $226.09.
