Pool Corporation (POOL): A Bull Case Theory

We came across a bullish thesis on Pool Corp. on Andvari’s Substack’s Substack by Douglas Ott. As of 20ᵗʰ September, Pool Corp.’s share was trading at $317.92. POOL’s trailing and forward P/E were 29.33 and 26.43 respectively according to Yahoo Finance.

Pool Corp., founded in 1980 as South-Central Pool Supply, has grown from a single location to become the largest distributor of pool products in the country. The company, now generating $5.3 billion in annual revenues, has experienced a challenging environment for new pool construction, with about 15% of its revenues historically coming from products related to new construction. However, after nine quarters of negative revenue growth, Pool Corp. reported 0.8% growth in quarterly revenues in 2Q2025, suggesting a potential turnaround.

The company’s growth is influenced by factors such as new home construction, interest rates, and the value of retirement accounts. According to CEO Peter Arvan, new pool construction usually lags new home construction by 2- to 3-years. Additionally, interest rates and retirement account values can impact demand for pools. While former CEO Manuel De La Mesa noted that interest rates had little impact on new pool construction in prior periods, the recent rate cuts and all-time highs in retirement accounts may encourage growth.

With interest rates beginning to decrease and the market at all-time highs, Pool Corp. may be entering a new period of normal growth if this leads to increased new pool construction. The company’s recent positive revenue growth, albeit slight, suggests it may be emerging from a difficult period. This potential turnaround, combined with favorable market conditions, presents an optimistic outlook for Pool Corp.’s future growth and investment potential.

Previously, we covered a bullish thesis on Pool Corp., Compounding Quality’s Substack. The stock has appreciated by 7.0% since our coverage. The previous thesis played out as it highlighted business’s consistency, financial rigor, and value re-rating, with bonus validation via Berkshire’s endorsement. Douglas Ott shares a similar view on Pool Corp., emphasizing its potential turnaround driven by favorable market conditions, such as decreasing interest rates and all-time highs in retirement accounts, which may encourage growth in new pool construction.

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