Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 9.3 |
| EV/EBITDA | 4.3 |
| Fwd P/E | 4.9 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 25.6x
- ▸PEG: 0.06
SWIM · Why this verdict
Why Latham Group (SWIM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Latham Group shows insider buying and strong cash conversion alongside an early death-cross recovery, but quality sits right at the engine's floor and analyst coverage is thin.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Modest insider buying of $315,745 (0.044% of market cap) contributes to a bullish insider signal, suggesting management confidence. Insider breakdown | Net insider buying should continue or at least remain net positive over the next two quarters. | ↓Deteriorating |
| CounterThe dollar amount is small relative to market cap, so this could be a routine, low-conviction purchase rather than a strong signal. | ||
Quality notes show excellent cash conversion at 328% FCF/NI and a strong Piotroski F-Score of 8/9, even though the overall quality score sits right at the engine's 4.0 floor. Quality breakdown | FCF/NI conversion should stay above 200% as the balance sheet strength persists. | →Stable |
| CounterQuality notes also flag no competitive moat, and the overall quality score exactly at the floor means any further deterioration would trigger an exit signal. | ||
The stock shows a death cross but improving MACD with RSI at 63, a pattern the engine classifies as a recovery setup, with momentum already back above the 5.5 threshold at 6.3. Chart pattern detection | The death cross should be reversed by a golden cross within the next two quarters as the recovery matures. | →Stable |
| CounterMomentum notes still show the stock below its 200-day moving average with a confirmed downtrend (MA slope -4.7% over 30 days), so the recovery is not yet confirmed. | ||
Analysts see 33% upside to a take-profit target of $7.08 from the current $6.14, though light analyst coverage dampens the signal. Sentiment breakdown | Price should close a meaningful share of the gap toward the $7.08 target over the next 12 months. | ↓Deteriorating |
| CounterLight analyst coverage explicitly dampens the reliability of the 33% upside estimate. | ||
Modest insider buying of $315,745 (0.044% of market cap) contributes to a bullish insider signal, suggesting management confidence.
↓DeterioratingInsider breakdown
- Expectation
- Net insider buying should continue or at least remain net positive over the next two quarters.
CounterThe dollar amount is small relative to market cap, so this could be a routine, low-conviction purchase rather than a strong signal.
Quality notes show excellent cash conversion at 328% FCF/NI and a strong Piotroski F-Score of 8/9, even though the overall quality score sits right at the engine's 4.0 floor.
→StableQuality breakdown
- Expectation
- FCF/NI conversion should stay above 200% as the balance sheet strength persists.
CounterQuality notes also flag no competitive moat, and the overall quality score exactly at the floor means any further deterioration would trigger an exit signal.
The stock shows a death cross but improving MACD with RSI at 63, a pattern the engine classifies as a recovery setup, with momentum already back above the 5.5 threshold at 6.3.
→StableChart pattern detection
- Expectation
- The death cross should be reversed by a golden cross within the next two quarters as the recovery matures.
CounterMomentum notes still show the stock below its 200-day moving average with a confirmed downtrend (MA slope -4.7% over 30 days), so the recovery is not yet confirmed.
Analysts see 33% upside to a take-profit target of $7.08 from the current $6.14, though light analyst coverage dampens the signal.
↓DeterioratingSentiment breakdown
- Expectation
- Price should close a meaningful share of the gap toward the $7.08 target over the next 12 months.
CounterLight analyst coverage explicitly dampens the reliability of the 33% upside estimate.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.4 |
| ROA | 1.7 |
| Gross margin | 2.7 |
| Op margin | 5.6 |
| Net margin | 0.5 |
| Current ratio | 7.5 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 968% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
6.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.1 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 6.7 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 71)
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.0 |
| Analyst rating | 6.6 |
| Price target | 7.8 |
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 21%
Insider
7.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.9 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.2 |
| quality rank | 1.5 |
| growth rank | 6.4 |
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 2.9 |
| 52w position | 5.9 |
| gap | 6.0 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.2 |
| days to cover | 3.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.5 |
| beta | 4.4 |
| debt equity | 6.4 |
- ▸High IV: 77%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 6.3 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:75d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- ASYMMETRY:0.4<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.36
Upside
+5.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.68>1.3, MCap $0.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.0<4.5, ASYMMETRY:0.4<1.5@spot) reinforce the read. Current asymmetry R:R is 0.36 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.0, Growth at 6.1, and Sentiment at 6.1; the weakest are Peer rank at 3.9, Momentum at 4.0, and Risk (lower is worse) at 4.4. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Insider Buying Confidence
Trip ifInsider signal flips from BULLISH to net selling exceeding $200,000 over the next 90 days.
- P2Excellent Cash Conversion At Floor
Trip ifFCF/NI conversion falls below 150%, down from the current 328%.
- P3Death Cross Recovery
Trip ifMomentum score falls below 5.0, undoing the recovery and reconfirming the death cross.
- P4Analyst Upside Target Gap
Trip ifAnalyst upside estimate falls below 15% from the current 33%.