LESL Stock Overview
Leslie's, Inc. operates as a direct-to-consumer pool and spa care brand in the United States.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$14.57|
|52 Week High||US$24.40|
|52 Week Low||US$13.01|
|1 Month Change||-0.069%|
|3 Month Change||-8.65%|
|1 Year Change||-32.70%|
|3 Year Change||n/a|
|5 Year Change||n/a|
|Change since IPO||-32.86%|
Recent News & Updates
Leslie's: 16% Short Interest Makes The Stock A Buy
Summary Leslie's shares have had a rough start since its IPO in 2020. During the third quarter, Leslie's continued to grow strongly, with revenue growing 13% year over year. 16% of their float is short. When short sellers buy back shares, the price is pushed up sharply. The valuation is attractive. Introduction Leslie's (LESL) shares have had a rough start since their IPO in 2020. Often the advice is 'don't buy IPO', and Leslie's is no exception. Leslie's is doing quite well. Both revenue and profits are growing steadily. And even during the past economic recessions, Leslie's continued to grow. Leslie's provides pool and spa maintenance products that are in constant demand for pool and spa owners. The reason that the stock price has declined since the IPO is probably the high valuation. Now that the price has declined, it's interesting to take a closer look at Leslie's. Short sellers expect Leslie's to fail because 16% of shares float is short, which is quite high. With sales growth of 13% yoy and a history of years of growth during recessions, I don't expect Leslie's to fail. On the contrary, due to the high short interest, I expect the stock to skyrocket. Short sellers must buy Leslie's shares to cover their short position. With a short float of 16%, a growing profitable business and a fair valuation, I see this as a good buying opportunity. Company Overview Leslie's has been a supplier of pool and spa care supplies in the United States since 1963 and sells its products directly to consumers through 952 corporate locations and e-commerce websites. Leslie's sells pool chemicals such as chlorine, sanitizers, water balancers, specialty chemicals and algae control. But also pool covers, pool equipment and pool maintenance products are part of the range. In addition, Leslie's provides pool equipment and repair services. The company has grown strongly and has acquired a market-leading share of approximately 15% of spending on residential aftermarket products. Their digital sales are estimated to be more than five times that of their largest digital competitor. The company is divided into the following segments. From their 2021 annual report: Residential Pool: The residential pool market consists of 8.6 million pools representing a total aftermarket sales opportunity of $6.9 billion. Many of our residential pool consumers visit our locations on a regular basis to conduct water testing, seek expert pool advice, and purchase products as well as utilize our integrated digital platforms. Residential Spa: The residential spa market consists of nearly 5.5 million spas or hot tubs representing a $0.8 billion aftermarket sales opportunity for chemicals and equipment. Including the $1.2 billion market for new spas, residential spa represents a total addressable market of approximately $2.0 billion. Professional Pool: The professional pool market consists of pool service professionals and professional pool operators. Pool service professionals specialize in maintenance and equipment repair for DIFM homeowners, businesses, and government entities. Professional pool operators manage 250,000 pools across hotels, motels, apartment complexes, and water parks. This market represents a total aftermarket sales opportunity of $2.4 billion. Leslie's Third Quarter Results Were Outstanding During the third quarter, Leslie's continued to grow strongly, with revenue growing 13% year over year. EBITDA grew at a slightly slower pace, growing 2% year over year as a result of a change in business mix, product margin and DC costs. Leslie's earnings are seasonal, with the third quarter being their top quarter with the highest earnings. The lowest profits are made during the winter periods. Third quarter 2022 summary (3Q22 Investor Presentation) Leslie's Expects Strong Growth Leslie's is steadily growing, but they have slightly lowered their outlook for fiscal year 2022. Still, they expect solid revenue growth of 15-17% yoy and adjusted EBITDA growth of 6-10% yoy. Their adjusted earnings per share are estimated at $0.90-$0.96, representing growth of 6-13%. Fiscal 2022 guidance (3Q22 Investor Presentation) How did this growth forecast come about? In the screenshot below, mainly price inflation has led to an increase in sales. Excluding inflation, Leslie's expects solid growth of 7%. Bridge to 16% sales growth (3Q22 Investor Presentation) Leslie's is benefiting from the coronavirus crisis as more consumers are spending time at home. Consumers also spent more time in their pool and spa, resulting in higher sales of maintenance products. Industry update (3Q22 Investor Presentation) Leslie's Is A Resilient Business Leslie's supplies consumables, such as pool chemicals and maintenance products, so they can expect a constant revenue stream. During the dotcom recession, the housing crisis and the corona crisis, the company grew its revenue strongly. Macroeconomic issues such as negative GDP growth, housing crisis, higher interest rates and even negative pool installation growth did not hinder Leslie's growth. Leslie's is recession proof (3Q22 Investor Presentation) Forward-Looking Thoughts Leslie's customer base is growing rapidly, providing it with a solid 15% market share. Their customers are also spending more, the average revenue per customer grew by 17%. A recent initiative is called Leslie's PRO, customers who need weekly maintenance on their pool or spa can take advantage of this. PRO customers also receive other benefits, such as: Wholesale pricing on the products pool pros use every day. A rebate program. Vendor discounts. Extended protection on Jacuzzi equipment and other select products. Free in-store water testing, free in-store labor, and free pool cleaner inspection. Because of the close relationship with the customers, customers are more likely to shop with Leslie's than with competitors. Leslie's has strategic growth initiatives to grow their business. Leslie's opened 10 new locations in growing markets in the third quarter. Not only is Leslie's growing organically, but they also have a strategic M&A program. In the current year, Leslie's made 4 acquisitions, adding 24 new locations for a total of approximately $68 run-rate revenue. In addition, Leslie's offers a new concept: AccuBlue Home v2.0. This also includes a $50 per month membership to the AccuBlue Home program. The AccuBlue Home is a test device that tests the water for health. Strategic growth initiatives (3Q22 Investor Presentation) The loyal customer base, PRO service, organic and M&A growth, and Leslie's AccuBlue Home v2.0 system will continue to drive sales going forward. The pool industry is expected to show a CAGR of 2%, and Leslie's is currently the market leader. Leslie's expects to have a 15% market share, and their rather large market share makes it more difficult to grow. Their deep customer relationships keep customers sticky, so I expect Leslie's to maintain market share and grow with the pool industry. Risks Analysts have a mixed view of Leslie's future. Analyst Dana Telsey sees challenges as Leslie's has experienced strong growth over the past 2 years due to a significant increase in demand related to the pandemic and US government stimulus measures. Price inflation on pool chemicals such as chlorine is also seen as a headwind to earnings. However, I don't see this as a headwind. Leslie's announced in its third quarter figures that it can calculate inflation properly without losing customers.
Leslie's, Inc. (NASDAQ:LESL) Shares Could Be 43% Below Their Intrinsic Value Estimate
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Leslie's, Inc...
|LESL||US Specialty Retail||US Market|
Return vs Industry: LESL exceeded the US Specialty Retail industry which returned -38% over the past year.
Return vs Market: LESL underperformed the US Market which returned -23% over the past year.
|LESL Average Weekly Movement||6.3%|
|Specialty Retail Industry Average Movement||7.9%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: LESL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: LESL's weekly volatility (6%) has been stable over the past year.
About the Company
Leslie's, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It offers pool chemicals consisting of chlorine, sanitizers, water balancers, specialty chemicals, and algae control; pool covers, including winter, solar and safety covers, leaf nets, cover reels, and cover alternatives; pool equipment, which comprise pool cleaners, pool pumps, pool filters, pool heating, and lighting; and pools, such as above ground pools, soft side pools, above ground pools liners and equipment, ladders and rails, and diving boards.
Leslie's Fundamentals Summary
|LESL fundamental statistics|
Is LESL overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|LESL income statement (TTM)|
|Cost of Revenue||US$850.84m|
Last Reported Earnings
Jul 02, 2022
Next Earnings Date
|Earnings per share (EPS)||0.80|
|Net Profit Margin||9.74%|
How did LESL perform over the long term?See historical performance and comparison
Is LESL undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 2/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for LESL?
Other financial metrics that can be useful for relative valuation.
|What is LESL's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does LESL's PE Ratio compare to its peers?
|LESL PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
SIG Signet Jewelers
EYE National Vision Holdings
WOOF Petco Health and Wellness Company
ASO Academy Sports and Outdoors
Price-To-Earnings vs Peers: LESL is expensive based on its Price-To-Earnings Ratio (18.3x) compared to the peer average (16.3x).
Price to Earnings Ratio vs Industry
How does LESL's PE Ratio compare vs other companies in the US Specialty Retail Industry?
Price-To-Earnings vs Industry: LESL is expensive based on its Price-To-Earnings Ratio (18.3x) compared to the US Specialty Retail industry average (6.2x)
Price to Earnings Ratio vs Fair Ratio
What is LESL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||18.3x|
|Fair PE Ratio||13.1x|
Price-To-Earnings vs Fair Ratio: LESL is expensive based on its Price-To-Earnings Ratio (18.3x) compared to the estimated Fair Price-To-Earnings Ratio (13.1x).
Share Price vs Fair Value
What is the Fair Price of LESL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: LESL ($14.57) is trading below our estimate of fair value ($25.78)
Significantly Below Fair Value: LESL is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Leslie's forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: LESL's forecast earnings growth (9.9% per year) is above the savings rate (1.9%).
Earnings vs Market: LESL's earnings (9.9% per year) are forecast to grow slower than the US market (14.6% per year).
High Growth Earnings: LESL's earnings are forecast to grow, but not significantly.
Revenue vs Market: LESL's revenue (5.9% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: LESL's revenue (5.9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if LESL's Return on Equity is forecast to be high in 3 years time
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How has Leslie's performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: LESL has a high level of non-cash earnings.
Growing Profit Margin: LESL's current net profit margins (9.7%) are higher than last year (9.4%).
Past Earnings Growth Analysis
Earnings Trend: LESL's earnings have grown significantly by 55% per year over the past 5 years.
Accelerating Growth: LESL's earnings growth over the past year (17.2%) is below its 5-year average (55% per year).
Earnings vs Industry: LESL earnings growth over the past year (17.2%) exceeded the Specialty Retail industry 0.1%.
Return on Equity
High ROE: LESL's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.
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How is Leslie's's financial position?
Financial Health Score1/6
Financial Health Score 1/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: LESL has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.
Long Term Liabilities: LESL has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.
Debt to Equity History and Analysis
Debt Level: LESL has negative shareholder equity, which is a more serious situation than a high debt level.
Reducing Debt: LESL's has negative shareholder equity, so we do not need to check if its debt has reduced over time.
Debt Coverage: LESL's debt is not well covered by operating cash flow (15.7%).
Interest Coverage: LESL's interest payments on its debt are well covered by EBIT (8.5x coverage).
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What is Leslie's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate LESL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate LESL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if LESL's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if LESL's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as LESL has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mike Egeck (63 yo)
Mr. Michael R. Egeck, also known as Mike, serves as Chief Executive Officer and Director at Leslie's, Inc. since February 2020. He serves as Chief Executive Officer at Leslie's Poolmart Inc. since February...
CEO Compensation Analysis
|Mike Egeck's Compensation vs Leslie's Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 02 2022||n/a||n/a|
|Apr 02 2022||n/a||n/a|
|Jan 01 2022||n/a||n/a|
|Oct 02 2021||US$8m||US$1m|
|Jul 03 2021||n/a||n/a|
|Apr 03 2021||n/a||n/a|
|Jan 02 2021||n/a||n/a|
|Oct 03 2020||US$10m||US$655k|
Compensation vs Market: Mike's total compensation ($USD7.91M) is about average for companies of similar size in the US market ($USD6.92M).
Compensation vs Earnings: Insufficient data to compare Mike's compensation with company performance.
Experienced Management: LESL's management team is considered experienced (2.5 years average tenure).
Experienced Board: LESL's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|08 Feb 22||BuyUS$495,000||Steven Weddell||Individual||25,000||US$19.80|
|08 Feb 22||BuyUS$1,999,422||Michael Egeck||Individual||101,700||US$19.66|
|16 Dec 21||SellUS$275,912,528||L Catterton Partners||Company||13,625,310||US$20.25|
|16 Dec 21||SellUS$167,056,223||GIC Special Investments Pte. Ltd.||Company||8,249,690||US$20.25|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||66,998||0.03%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Leslie's, Inc.'s employee growth, exchange listings and data sources
- Name: Leslie's, Inc.
- Ticker: LESL
- Exchange: NasdaqGS
- Founded: 1963
- Industry: Specialty Stores
- Sector: Retail
- Implied Market Cap: US$2.667b
- Shares outstanding: 183.03m
- Website: https://lesliespool.com
Number of Employees
- Leslie's, Inc.
- 2005 East Indian School Road
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|LE3||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Oct 2020|
|LESL||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Oct 2020|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/26 00:00|
|End of Day Share Price||2022/09/26 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.