Leslie's (LESL) AI Stock Analysis

• Market Cap: $77.60M
• Dividend Yield: N/A
• Average Volume (3M): 4.38M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.09
• Revenue Growth: -6.12%
• EPS Growth: -396.11%
• Country: US
• Employees: 3,850
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Home Improvement
• EPS (TTM): -0.25
• Shares Outstanding: 185,421,660
• 10 Day Avg. Volume: 5,046,098
• 30 Day Avg. Volume: 4,379,730
• PEG Ratio: 0.03
• Price to Book (P/B): -0.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 2.35
• Enterprise Value/Market Cap: 15.04
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 2.52
• Enterprise Value/Ebitda: 3.62
• 1Y Price Target: $1.00
• Price Target Upside: 138.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 43 Neutral
• Price Target: $0.50 ▲(19.05%Upside)

Leslie's overall stock score is primarily impacted by its weak financial performance and concerning valuation. Although the company is taking steps to improve efficiency and customer engagement, declining sales and profitability remain critical issues. Technical analysis further reflects negative sentiment, with the stock in an oversold condition.

Positive Factors

Customer Convenience

A new partnership with Uber is set to add same-day delivery capabilities, placing further emphasis on LESL’s focus on customer convenience.

Inventory Management

Management is guiding to a $15M year-over-year decrease in year-end inventory, which will benefit free cash flow.

Operational Improvements

All 26 local fulfillment centers are now operational, helping improve in-stock levels for its never-out SKUs to over 99% in the quarter.

Negative Factors

Financial Flexibility

LESL's leverage ratio limits the business's financial flexibility and reinvestments to stimulate growth and improve market share positioning.

Market Share

There are concerns on market share due to competitive dynamics, such as increased ecommerce penetration and the shift to other mass channels.

Topline Growth

Continued concerns on market share erosion and limited visibility on a sustainable inflection in topline.

Leslie's Business Overview & Revenue Model

Company Description

Leslie's, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It offers pool chemicals consisting of chlorine, sanitizers, water balancers, specialty chemicals, and algae control; pool covers, including winter, solar and safety covers, leaf nets, cover reels, and cover alternatives; pool equipment, which comprise pool cleaners, pool pumps, pool filters, pool heating, and lighting; and pools, such as above ground pools, soft side pools, above ground pools liners and equipment, ladders and rails, and diving boards. The company also provides pool maintenance products, including pool closing and opening supplies, filter catridges, chlorine floaters, backwash and vacuum hoses, and cleaning attachments; parts, such as automatic pool cleaner parts, pool filter and pump parts, and pool heater and heat pump parts; and safety, recreational, and fitness-related products. In addition, it provides pool equipment and repair services. The company markets its products through 952 company operated locations in 38 states and e-commerce websites. It serves the residential, professional, and commercial consumers. The company was founded in 1963 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

Leslie's generates revenue primarily through the sale of its diverse range of pool supplies and equipment via its extensive retail store network and e-commerce platform. The company's key revenue streams include sales of pool chemicals, cleaning equipment, and various pool maintenance and accessory products. Additionally, Leslie's offers professional services such as installation, repair, and maintenance, which contribute to its earnings. The company's revenue is further supported by customer loyalty programs and various marketing initiatives that drive repeat business. Strategic partnerships with manufacturers and suppliers of pool-related products enhance Leslie's ability to offer a wide selection of high-demand items, further solidifying its revenue model.

Leslie's Financial Statement Overview

Summary

Leslie's financial performance is under significant pressure with declining revenue and profitability margins, negative shareholder equity, and high leverage. Although cash flow remains positive, overall financial health indicates notable challenges requiring strategic improvements to stabilize and grow.

Income Statement

Leslie's shows a declining revenue trend over recent periods, with TTM (Trailing-Twelve-Months) revenue at $1.32 billion, down from $1.33 billion in the previous year and $1.45 billion two years ago. Gross profit margin has decreased to 35.1% in the TTM period, and net profit margin is negative at -3.42%, highlighting profitability challenges. The declining EBIT and EBITDA margins further emphasize the pressure on operational efficiency.

Balance Sheet

The company's balance sheet is concerning, with negative stockholders' equity at -$269.46 million in the TTM period and a high debt-to-equity ratio due to significant liabilities. A negative equity ratio and decreasing return on equity (ROE) indicate financial instability and potential risks related to leverage.

Cash Flow

Despite operational challenges, Leslie's shows some positive aspects in cash flow with a TTM operating cash flow of $68.24 million and a free cash flow of $33.79 million. However, the free cash flow growth rate is negative compared to previous periods, and the operating cash flow to net income ratio reflects operational difficulties.

Breakdown	TTM	Sep 2024	Sep 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.32B	1.33B	1.45B	1.56B	1.34B	1.11B
Gross Profit	463.72M	476.79M	548.22M	673.74M	595.16M	460.71M
EBITDA	60.79M	90.19M	136.32M	269.13M	224.09M	176.81M
Net Income	-45.16M	-23.38M	27.24M	159.03M	126.63M	58.56M
Balance Sheet
Total Assets	1.04B	1.05B	1.03B	1.11B	1.04B	746.44M
Cash, Cash Equivalents and Short-Term Investments	17.25M	108.50M	55.42M	112.29M	345.06M	157.07M
Total Debt	1.11B	1.05B	1.04B	1.03B	1.02B	1.37B
Total Liabilities	1.31B	1.23B	1.20B	1.31B	1.26B	1.57B
Stockholders Equity	-269.46M	-177.15M	-161.36M	-197.95M	-217.56M	-827.00M
Cash Flow
Free Cash Flow	33.79M	60.22M	-32.11M	34.92M	140.63M	82.78M
Operating Cash Flow	68.24M	107.47M	6.47M	66.64M	169.56M	103.41M
Investing Cash Flow	-34.32M	-47.16M	-52.54M	-138.98M	-35.35M	-26.81M
Financing Cash Flow	-25.10M	-7.22M	-10.80M	-158.87M	53.78M	-10.43M

Leslie's Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LESL, the sentiment is Negative. The current price of 0.42 is below the 20-day moving average (MA) of 0.46, below the 50-day MA of 0.64, and below the 200-day MA of 1.61, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 36.51 is Neutral, neither overbought nor oversold. The STOCH value of 28.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LESL.

Leslie's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HD	72 Outperform	$368.19B	25.11	299.52%	2.49%	7.33%	-1.19%
FND	71 Outperform	$8.96B	43.52	9.74%	―	2.96%	-9.49%
HVT	70 Outperform	$359.71M	17.38	6.97%	5.75%	-12.29%	-55.73%
LOW	70 Outperform	$125.61B	18.57	-51.07%	2.05%	-2.52%	-2.98%
TTSH	65 Neutral	$294.32M	357.61	0.66%	―	-6.41%	-91.36%
Sector *	63 Neutral	$16.85B	11.30	-7.01%	2.93%	1.72%	-24.85%
LESL	43 Neutral	$77.60M	―	12.90%	―	-6.12%	-396.11%

Leslie's Corporate Events

Leslie’s Announces Key Leadership Changes for 2025

Leslie’s, Inc. announced significant leadership changes effective March 14, 2025, as part of its transformation strategy. Tony Iskander was appointed as the Interim Chief Financial Officer and Treasurer, bringing nearly 30 years of experience in corporate finance and operational transformation. Naomi Cramer was promoted to Chief Retail Operations and Talent Officer, combining roles to enhance retail execution and drive long-term growth. These changes aim to strengthen Leslie’s strategic focus on customer centricity, convenience, and asset utilization, with an emphasis on debt reduction and operational efficiency. The departures of Scott Bowman, the former CFO, and Dave Caspers, Chief Stores Officer, were not due to disagreements with the company.