What Happened?
Shares of swimming pool distributor Pool (NASDAQ: POOL) jumped 3% in the morning session after the company reported second-quarter earnings that surpassed analyst expectations and provided upbeat guidance.
The swimming pool supplies distributor announced second-quarter earnings per share of $5.17, which narrowly beat the analyst forecast of $5.15. While revenue of $1.78 billion was just shy of the $1.79 billion consensus estimate, it still marked a 1% increase compared to the same period last year. Investors appeared particularly encouraged by the company's updated full-year earnings guidance, which was set at a range of $10.80 to $11.30 per share. The company credited the solid performance to continued strong demand for maintenance products and noted improving trends in discretionary spending.
After the initial pop the shares cooled down to $321.38, up 1.4% from previous close.
Is now the time to buy Pool? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Pool’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 10.8% on the news that the company reported strong second-quarter earnings. Pool narrowly topped analysts' revenue and EPS expectations this quarter. Notably topline growth deceleration moderated (down 5% vs 7% drop in the previous quarter) amidst the observed trend of "lower consumer spending on high dollar discretionary items." Zooming out, we think this was a decent quarter, showing the company is staying on target.
Pool is down 3.5% since the beginning of the year, and at $321.38 per share, it is trading 17.6% below its 52-week high of $390.03 from November 2024. Investors who bought $1,000 worth of Pool’s shares 5 years ago would now be looking at an investment worth $1,056.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
