Here’s Why Hayward Holdings Inc. (HAYW) Looks Undervalued After the Recent Selloff

Company Overview - Hayward Holdings, Inc. (NYSE:HAYW) is a leading global pool equipment manufacturer, primarily serving the residential pool market, with North America accounting for 85% of sales and over 90% of profits [3] - The company offers a range of products including Pumps, Automation and Sanitization, Heaters, Filters, Lighting and Water Features, and Cleaners [3] - Approximately 80% of total sales come from the existing installed base of pools, with 50% attributed to repair and replacement, making the business relatively resilient to economic cycles [3] Financial Performance - Hayward Holdings, Inc. has demonstrated strong margins and cash-generation potential, leading the fund to view the stock as undervalued relative to mid-cycle earnings [2] - The stock's one-month return was approximately 5.51%, and it gained about 11.59% over the last 12 months, closing at approximately $16.85 per share on January 16, 2026, with a market capitalization of about $3.65 billion [2] Market Dynamics - The pool industry experienced supercharged growth during the early stages of COVID-19, followed by a period of weak end-market demand exacerbated by destocking in the distribution channel [3] - Although the industry has stabilized, there is still lackluster demand for newly built and remodeled pools, but it is expected that the discretionary sides of the business will recover over time [3] - Hayward is positioned to continue raising prices and growing volumes within the installed base of pools due to strong pricing power, as purchase decisions are typically made by pool service professionals who are less sensitive to price [3]