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LESL

Leslie's NasdaqGS:LESL Stock Report

Last Price

US$14.57

Market Cap

US$2.7b

7D

2.5%

1Y

-32.7%

Updated

26 Sep, 2022

Data

Company Financials +
LESL fundamental analysis
Snowflake Score
Valuation2/6
Future Growth1/6
Past Performance3/6
Financial Health1/6
Dividends0/6

LESL Stock Overview

Leslie's, Inc. operates as a direct-to-consumer pool and spa care brand in the United States.

Leslie's Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Leslie's
Historical stock prices
Current Share PriceUS$14.57
52 Week HighUS$24.40
52 Week LowUS$13.01
Beta0
1 Month Change-0.069%
3 Month Change-8.65%
1 Year Change-32.70%
3 Year Changen/a
5 Year Changen/a
Change since IPO-32.86%

Recent News & Updates

Sep 09

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.

Sep 05
Leslie's, Inc. (NASDAQ:LESL) Shares Could Be 43% Below Their Intrinsic Value Estimate

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...

Shareholder Returns

LESLUS Specialty RetailUS Market
7D2.5%-9.3%-6.9%
1Y-32.7%-40.0%-23.7%

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.

Price Volatility

Is LESL's price volatile compared to industry and market?
LESL volatility
LESL Average Weekly Movement6.3%
Specialty Retail Industry Average Movement7.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
19633,700Mike Egeckhttps://lesliespool.com

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

How do Leslie's's earnings and revenue compare to its market cap?
LESL fundamental statistics
Market CapUS$2.67b
Earnings (TTM)US$145.64m
Revenue (TTM)US$1.50b

18.3x

P/E Ratio

1.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LESL income statement (TTM)
RevenueUS$1.50b
Cost of RevenueUS$850.84m
Gross ProfitUS$644.62m
Other ExpensesUS$498.98m
EarningsUS$145.64m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.80
Gross Margin43.11%
Net Profit Margin9.74%
Debt/Equity Ratio-305.1%

How did LESL perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is LESL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

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

  • Analyst Forecast

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.

LESL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.3x
Enterprise Value/EBITDA12.8x
PEG Ratio1.8x

Price to Earnings Ratio vs Peers

How does LESL's PE Ratio compare to its peers?

LESL PE Ratio vs Peers
The above table shows the PE ratio for LESL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average16.3x
SIG Signet Jewelers
5.7x-1.5%US$2.5b
EYE National Vision Holdings
28.6x9.3%US$2.5b
WOOF Petco Health and Wellness Company
25.6x19.5%US$3.1b
ASO Academy Sports and Outdoors
5.3x2.1%US$3.4b
LESL Leslie's
18.3x9.9%US$2.7b

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.

LESL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.3x
Fair PE Ratio13.1x

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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Future Growth

How is Leslie's forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


9.9%

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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Past Performance

How has Leslie's performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


55.0%

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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Financial Health

How is Leslie's's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

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).


Balance Sheet


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Dividend

What is Leslie's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Leslie's Dividend Yield vs Market
How does Leslie's dividend yield compare to the market?
SegmentDividend Yield
Company (Leslie's)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Specialty Retail)2.6%
Analyst forecast in 3 Years (Leslie's)0%

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.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

Mike Egeck (63 yo)

2.58yrs

Tenure

US$7,911,515

Compensation

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
How has Mike Egeck's remuneration changed compared to Leslie's's earnings?
DateTotal Comp.SalaryCompany Earnings
Jul 02 2022n/an/a

US$146m

Apr 02 2022n/an/a

US$141m

Jan 01 2022n/an/a

US$142m

Oct 02 2021US$8mUS$1m

US$127m

Jul 03 2021n/an/a

US$125m

Apr 03 2021n/an/a

US$78m

Jan 02 2021n/an/a

US$54m

Oct 03 2020US$10mUS$655k

US$59m

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.


Leadership Team

Experienced Management: LESL's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: LESL's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

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

NasdaqGS:LESL Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
08 Feb 22BuyUS$495,000Steven WeddellIndividual25,000US$19.80
08 Feb 22BuyUS$1,999,422Michael EgeckIndividual101,700US$19.66
16 Dec 21SellUS$275,912,528L Catterton PartnersCompany13,625,310US$20.25
16 Dec 21SellUS$167,056,223GIC Special Investments Pte. Ltd.Company8,249,690US$20.25

Ownership Breakdown

What is the ownership structure of LESL?
Owner TypeNumber of SharesOwnership Percentage
State or Government66,9980.03%
Individual Insiders6,401,7563.0%
VC/PE Firms29,100,63213.6%
Institutions178,352,03083.4%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 84.01% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
9.9%
L Catterton Partners
18,120,403$264.0m0%26.73%
7.89%
Champlain Investment Partners, LLC
14,449,367$210.5m36.58%1.29%
6.6%
The Vanguard Group, Inc.
12,074,407$175.9m-8.95%no data
6%
GIC Special Investments Pte. Ltd.
10,980,229$160.0m0%7.79%
5.92%
Capital Research and Management Company
10,837,654$157.9m0%0.01%
5.79%
William Blair Investment Management, LLC
10,601,777$154.5m-2.64%0.26%
5.1%
Kayne Anderson Rudnick Investment Management, LLC
9,337,679$136.0m-4.21%0.37%
3.44%
Allspring Global Investments, LLC
6,295,084$91.7m31.95%0.13%
3.42%
BlackRock, Inc.
6,265,643$91.3m-3.84%no data
2.88%
Spyglass Capital Management LLC
5,276,997$76.9m23.52%4.22%
2.86%
Pictet Asset Management Limited
5,242,171$76.4m-4.86%0.06%
2.71%
Frontier Capital Management Co LLC
4,968,419$72.4m9.07%0.67%
2.52%
Janus Henderson Group plc
4,612,514$67.2m7.26%0.04%
2.33%
Columbia Management Investment Advisers, LLC
4,260,805$62.1m-0.78%0.02%
2.02%
J.P. Morgan Asset Management, Inc.
3,693,524$53.8m-10.36%0.01%
1.97%
TimesSquare Capital Management, LLC
3,606,834$52.6m21.84%0.6%
1.75%
Massachusetts Financial Services Company
3,209,752$46.8m-24.86%0.01%
1.75%
Cardinal Capital Management, L.L.C.
3,195,266$46.6m376.81%1.42%
1.54%
Brown Advisory Incorporated
2,826,041$41.2m-46.01%0.07%
1.43%
Stephens Investment Management Group, LLC
2,614,575$38.1m0.64%0.66%
1.36%
State Street Global Advisors, Inc.
2,490,454$36.3m15.88%no data
1.22%
Steven Ortega
2,233,074$32.5m0%no data
1.21%
Michael Egeck
2,221,477$32.4m10.2%no data
1.2%
Lazard Asset Management LLC
2,194,613$32.0m5.43%0.03%
1.18%
Artisan Partners Limited Partnership
2,157,983$31.4m27.89%0.03%

Company Information

Leslie's, Inc.'s employee growth, exchange listings and data sources


Key Information

  • 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


Location

  • Leslie's, Inc.
  • 2005 East Indian School Road
  • Phoenix
  • Arizona
  • 85016
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LE3DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2020
LESLNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/26 00:00
End of Day Share Price2022/09/26 00:00
Earnings2022/07/02
Annual Earnings2021/10/02


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.