Evaluating Pool Corporation (POOL) Valuation Following Q3 Earnings Growth and Operational Stability

Pool Corporation (POOL) just released its third quarter results. The headline numbers were encouraging for investors, as sales and net income saw modest growth compared to last year. Profit margins benefited from ongoing pricing optimizations.

See our latest analysis for Pool.

Despite a challenging year for the industry, Pool’s share price has drifted lower, with an 11.8% decline year-to-date, while the total shareholder return over the past 12 months stands at -18.6%. This follows last week’s upbeat earnings and the company highlighting operational stability, but momentum is still searching for a clear turnaround.

If Pool’s recent numbers have you curious about what else is out there, this could be the perfect moment to broaden your watchlist and discover fast growing stocks with high insider ownership

With shares lagging over the past year even as operational results hold steady, the big question now is whether Pool’s current valuation reflects untapped upside or if the market already anticipates brighter days ahead.

Most Popular Narrative: 11.9% Undervalued

Pool’s current share price sits well below the narrative’s calculated fair value, suggesting analysts see more upside than the recent selloff implies.

Sustained migration to high-growth Sun Belt regions like Florida and Arizona, with POOLCORP increasing local branches and franchise presence, positions the company to capture outsized revenue and market share gains as demographic shifts boost both new installations and recurring maintenance activity. Growing consumer emphasis on home-based leisure and wellness is maintaining structurally elevated demand for pools and related services. This trend is driving resilient recurring revenue for maintenance and enhancements, which should support top-line stability and growth even during new construction lulls.

Read the complete narrative.

Curious how these demographic trends and new revenue streams add up to a surprisingly bullish valuation? Discover which financial levers the narrative expects Pool to pull and just how bold those future profit assumptions get. See the numbers behind the story right now.

Result: Fair Value of $333.27 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a prolonged housing slowdown or persistent inflation in materials and labor costs could significantly reduce Pool's growth prospects and limit its valuation upside.

Find out about the key risks to this Pool narrative.

Another View: What Do Market Ratios Suggest?

Looking at the company through a market ratios lens paints a more cautious picture. Pool’s price-to-earnings ratio stands at 26.7x, making it look expensive compared to both the global industry average of 17.6x and the peer average of 20.4x. Our fair ratio model suggests the market could eventually move closer to 15.7x. This would mean today’s shares are priced with optimism baked in and little margin for error. Does this valuation risk point to vulnerability, or is there more upside left to capture?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Pool Narrative

If you think there’s more to the story or want to test your own theories, you can quickly build a narrative based on your own analysis. Do it your way.

A great starting point for your Pool research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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