Pool (POOL) Stock Forecast & Price Target

Pool is attractive because it is priced at trough multiples while demand remains depressed, yet the business has demonstrated resilience through a recurring maintenance base that represents about 65% of sales and supported 2Q sales growth of 2.2% year over year. Its installed-base model, resilient gross margin near the 30% level, and operating leverage from existing capacity point to stronger midcycle earnings, with the company already outperforming the market slightly in CY25 and in 1H26. Additional upside comes from new sales force initiatives expected to begin in 4Q, along with M&A and product introductions that should help sustain share gains even before a broader pool-construction recovery.

Pool is facing a fundamentally muted outlook because its 3Q earnings beat was driven more by pricing, sales strength, and a $0.07 share-repurchase benefit than by durable margin expansion. Gross margin fell 60 bps to 29.0% and operating margin compressed 90 bps to 11.4% as higher inbound freight, unfavorable mix, incentives, and M&A-related costs continued to pressure profitability, while management still maintained FY2026 EPS guidance. Although sales rose 4% to $1.51 billion and guidance calls for 3%-4% sales growth, the expected 30-50 bps gross margin decline and flat-to-slightly-down new construction point to limited earnings leverage and lingering affordability pressure.