LESL: Future Share Performance Will Depend On 1-For-20 Reverse Stock Split Execution

Leslie's fair value estimate has been revised downward from $9.34 to $8.90 per share as analysts lower price targets in response to recent earnings, ongoing market share pressure, and a challenging retail environment.

Analyst Commentary

Following recent earnings results and market developments, analysts have provided updated perspectives on Leslie's valuation and outlook. These observations highlight both cautious sentiment and areas of potential upside for the company.

• Some analysts maintain steady estimates for comparable sales and EBITDA margins, expressing confidence in the company’s core operating performance despite near-term pressures.
• Efforts to adjust target multiples reflect an emphasis on fair value, which signals that Leslie’s share price may align more closely with underlying fundamentals over time.
• The completion of a reverse stock split is viewed as a positive step for share structure. This could improve trading dynamics and attract a broader base of investors.

• Price targets have been lowered significantly in response to ongoing market share losses and increased competition, which indicates persistent execution challenges.
• Analysts cite a tough retail environment, with macroeconomic headwinds and weak consumer demand affecting short-term growth prospects.
• Recent downward revisions in guidance point to continued uncertainty around revenue stability and profitability in the future.
• Target multiples are being reduced as analysts take a cautious approach to valuation, given the company's exposure to broader sector weakness.

What's in the News

• On September 26, 2025, Leslie's filed an amendment to its certificate of incorporation, enacting a 1-for-20 reverse stock split and reducing the number of authorized shares. The changes took effect immediately. The company’s common stock will trade on a split-adjusted basis as of September 29, 2025. (Key Developments)
• A significant stock split at a 1-for-20 ratio will take effect for Leslie’s stockholders on September 29, 2025. (Key Developments)
• Jeff White has been appointed chief financial officer. He brings extensive experience in financial management and operational leadership. The appointment is effective October 5, 2025. (Key Developments)
• At a special shareholder meeting on September 10, 2025, amendments authorizing a reverse stock split of Leslie’s common stock at various ratios were approved. The final terms were determined by the board. (Key Developments)
• Leslie’s was removed from the S&P Global BMI Index. (Key Developments)

Valuation Changes

• Fair Value Estimate: Lowered from $9.34 to $8.90 per share, representing a modest downward adjustment.
• Discount Rate: Remains unchanged at 12.5 percent, reflecting stable expectations for risk and required return.
• Revenue Growth: Remains nearly flat, with a negligible decrease from 0.57 percent to 0.57 percent.
• Net Profit Margin: Essentially unchanged, moving fractionally lower from 4.74 percent to 4.74 percent.
• Future P/E Ratio: Decreased from 1.99x to 1.89x, indicating lower projected earnings multiples in analyst models.