Earnings Release: Here's Why Analysts Cut Their Pool Corporation (NASDAQ:POOL) Price Target To US$324

Pool Corporation (NASDAQ:POOL) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 2.5% short of analyst estimates at US$1.1b, and statutory earnings of US$1.42 per share missed forecasts by 4.1%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our free stock report includes 1 warning sign investors should be aware of before investing in Pool. Read for free now.

Following last week's earnings report, Pool's 13 analysts are forecasting 2025 revenues to be US$5.33b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 3.1% to US$11.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.36b and earnings per share (EPS) of US$11.25 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Pool

The consensus price target fell 7.5% to US$324, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Pool analyst has a price target of US$375 per share, while the most pessimistic values it at US$280. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Pool's revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2025 being well below the historical 7.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Pool is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pool's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Pool going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Pool that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.