Marinemax (HZO) AI Stock Analysis

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Marinemax

(NYSE:HZO)

63Neutral

MarineMax faces significant challenges, particularly in cash flow management and market momentum, which weigh heavily on its stock score. Despite these hurdles, the company's ability to maintain strong gross margins and its strategic focus on high-margin businesses provide some optimism. The stock's valuation is attractive, suggesting potential upside if operational efficiencies improve and market conditions stabilize.

Positive Factors

Balance Sheet Strength

A strong balance sheet with $145M in cash and a net debt/EBITDA of 1.6x allows capital allocation flexibility.

Financial Performance

Gross profit improved to 36.2%, exceeding the initial estimate of 32%.

Strategic Guidance

Management reaffirmed FY25 guidance, expecting improved activity in the spring selling season.

Negative Factors

Industry Challenges

Industry pressures are likely to persist, potentially impacting margins.

Inventory Levels

Softer sales led to higher-than-expected inventory, which is anticipated to decrease over time.

Sales Performance

Sales of $468.5M were down -11% and came in below expectations due to disruptions from hurricanes and a soft retail environment.

Marinemax (HZO) vs. S&P 500 (SPY)

Market Cap

$426.90M

Dividend YieldN/A

Average Volume (3M)410.75K

Price to Earnings (P/E)7.9

Beta (1Y)1.81

Revenue Growth-1.73%

EPS Growth-40.39%

CountryUS

Employees4,050

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)2.38

Shares Outstanding22,707,321

10 Day Avg. Volume580,188

30 Day Avg. Volume410,753

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.22

Price to Cash Flow (P/CF)-0.90

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$34.67

Price Target Upside89.14% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

Marinemax Business Overview & Revenue Model

Company DescriptionMarineMax, Inc. operates as a recreational boat and yacht retailer and superyacht services company in the United States. It operates through two segments, Retail Operations and Product Manufacturing. The company sells new and used recreational boats, including pleasure and fishing boats, mega-yachts, yachts, sport cruisers, motor yachts, pontoon boats, ski boats, jet boats, and other recreational boats. It also offers marine parts and accessories comprising marine electronics; dock and anchoring products that include boat fenders, lines, and anchors; boat covers; trailer parts; water sport accessories, which comprise tubes, lines, wakeboards, and skis; engine parts; oils; lubricants; steering and control systems; corrosion control products and service products; high-performance accessories, including propellers and instruments; and a line of boating accessories, such as life jackets, inflatables, and water sports equipment. In addition, the company provides novelty items, such as shirts, caps, and license plates; marine engines and equipment; maintenance, repair, and slip and storage accommodation services; and boat or yacht brokerage services, as well as charters yachts and power catamarans. Further, it offers new or used boat finance services; arranges insurance coverage, including boat property, disability, undercoating, gel sealant, fabric protection, and casualty insurance coverage; and manufactures and sells sport yachts and yachts. Additionally, the company operates vacations in Tortola, British Virgin Islands. It also markets and sells its products through offsite locations and print catalog. The company has 79 retail locations in Alabama, California, Connecticut, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Washington, and Wisconsin. MarineMax, Inc. was incorporated in 1998 and is based in Clearwater, Florida.

How the Company Makes MoneyMarineMax generates revenue primarily through the sale of new and used boats and yachts, which constitutes the majority of its income. Additional revenue streams include providing boat repair and maintenance services, offering boat storage facilities, and selling related marine products such as parts and accessories. The company also offers financing and insurance services to enhance the purchasing experience for customers. Strategic partnerships with leading boat manufacturers and financial institutions bolster its market presence and facilitate sales, while its extensive service offerings enhance customer loyalty and contribute to recurring revenue.

Marinemax Financial Statement Overview

Summary

MarineMax shows strong gross profitability but faces challenges with operational efficiency and cash flow management. The balance sheet is stable with moderate leverage, but stagnant revenue and declining margins are concerns, alongside potential liquidity risks from cash flow issues.

Income Statement

Positive

The income statement shows moderate performance. The gross profit margin is approximately 33.5% for the TTM, showing strong profitability. However, the net profit margin is relatively low at 2.3%, indicating high operational costs. Revenue growth from 2023 to 2024 is stagnant, with a slight decrease observed in the TTM. The decline in EBIT and EBITDA margins suggests reduced operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.94 in the TTM, highlighting moderate leverage. Return on equity is 5.6% in the TTM, indicating modest profitability for shareholders. The equity ratio stands at 37.7%, implying a balanced capital structure with a fair amount of assets financed by equity.

Cash Flow

Neutral

The cash flow situation is concerning, with negative operating and free cash flows in the TTM, indicating insufficient cash generation from operations. The operating cash flow to net income ratio is negative, underscoring cash flow challenges. Free cash flow has significantly declined compared to previous years, and free cash flow growth is negative, which may affect future liquidity.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.37B	2.43B	2.39B	2.31B	2.06B	1.51B
	Gross Profit
795.37M	801.20M	835.33M	805.75M	659.43M	398.71M
	EBIT
150.37M	128.23M	200.80M	265.20M	209.46M	106.72M
	EBITDA
181.75M	172.71M	241.83M	284.62M	225.06M	119.49M
	Net Income Common Stockholders
55.20M	38.07M	109.28M	197.99M	154.98M	74.63M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
216.68M	224.33M	201.46M	228.27M	222.19M	155.49M
	Total Assets
2.63B	2.61B	2.42B	1.35B	1.01B	775.32M
	Total Debt
1.28B	1.23B	1.09B	279.56M	182.55M	192.06M
	Net Debt
1.06B	1.01B	892.46M	51.28M	-39.64M	36.57M
	Total Liabilities
1.69B	1.62B	1.50B	570.11M	412.93M	319.92M
	Stockholders Equity
931.31M	975.79M	915.84M	782.67M	594.89M	455.40M
Cash Flow		Free Cash Flow
-148.06M	-86.08M	-287.64M	18.14M	347.76M	291.87M
	Operating Cash Flow
-82.65M	-25.66M	-222.24M	76.59M	373.88M	304.68M
	Investing Cash Flow
-70.51M	-576.37M	-576.37M	-140.45M	-161.13M	-30.11M
	Financing Cash Flow
88.86M	770.40M	770.40M	73.06M	-145.74M	-158.13M

Marinemax Technical Analysis

Technical Analysis Sentiment

Negative

Last Price18.33

Price Trends

50DMA

23.58

Negative

100DMA

26.70

Negative

200DMA

29.31

Negative

Market Momentum

MACD

-1.55

Negative

RSI

36.22

Neutral

STOCH

34.14

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HZO, the sentiment is Negative. The current price of 18.33 is below the 20-day moving average (MA) of 20.31, below the 50-day MA of 23.58, and below the 200-day MA of 29.31, indicating a bearish trend. The MACD of -1.55 indicates Negative momentum. The RSI at 36.22 is Neutral, neither overbought nor oversold. The STOCH value of 34.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HZO.

Marinemax Risk Analysis

Marinemax disclosed 46 risk factors in its most recent earnings report. Marinemax reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Marinemax Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MPAA	68 Neutral	$174.88M	―	-6.40%	―	4.26%	64.64%
ONEW	65 Neutral	$235.51M	―	-2.97%	―	-7.72%	81.39%
MPX	64 Neutral	$288.78M	16.68	11.94%	6.78%	-38.35%	-59.21%
HZO	63 Neutral	$426.90M	7.89	5.75%	―	-1.73%	-40.39%
BC	63 Neutral	$2.89B	22.69	7.50%	3.86%	-18.19%	-68.10%
MCFT	60 Neutral	$268.04M	―	-1.53%	―	-45.70%	-115.77%
Sector *	60 Neutral	$6.54B	11.34	3.27%	4.27%	2.37%	-20.86%

* Consumer Cyclical Sector Average

Performance Comparison

HZO

Marinemax

18.33

-9.34

-33.75%

Brunswick

43.48

-39.53

-47.62%

MPX

Marine Products

8.26

-0.93

-10.12%

MPAA

Motorcar Parts Of America

8.93

3.43

62.36%

MCFT

MasterCraft Boat Holdings

16.00

-5.50

-25.58%

ONEW

OneWater Marine

13.49

-10.51

-43.79%

Marinemax Earnings Call Summary

Earnings Call Date: Jan 23, 2025 | % Change Since: -34.40% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a challenging quarter affected by environmental disruptions and a softer retail environment. However, the focus on high-margin businesses and strategic brand expansions provide optimism for future performance.

Highlights

Strong Gross Margin Performance

Gross margin exceeded 36% in the quarter, driven by higher-margin businesses such as Marinas, Super Yacht services, finance, and insurance. This performance was notable despite a challenging retail environment.

Expansion of Cruiser Yachts Brand

MarineMax expanded its Cruiser Yachts brand across all stores in key regions in the Southern U.S., including Texas and West Florida, enhancing its product offerings.

Growth in Higher-Margin Businesses

Non-boat revenue and higher-margin streams have grown significantly since 2019, contributing to sustainable profit margins.

Positive January Revenue Outlook

January revenue is anticipated to be up year-over-year, indicating a potential positive trend as the quarter progresses.

Lowlights

11% Decrease in Same-Store Sales

Same-store sales were down 11% in Q1, with Florida being the largest regional impact due to hurricanes and a softer retail environment.

Impacts from Hurricanes

The company faced operational disruptions and revenue strain due to Hurricanes Helene and Milton, especially affecting Florida locations.

Elevated Inventory Levels

Inventory levels were higher than anticipated at the end of the quarter due to lower-than-expected revenue, leading to increased short-term borrowings.

Revenue Decline

Overall revenue declined nearly $60 million year-over-year, reflecting challenges from environmental and economic factors.

Company Guidance

During the MarineMax, Inc. earnings call for the first quarter of fiscal 2025, the company provided a comprehensive overview of their performance metrics amidst challenging market conditions. Despite a nearly $60 million decline in revenue, primarily due to hurricanes and a softer retail environment, MarineMax maintained a robust gross margin of over 36%, driven by their strategic focus on higher-margin businesses such as Marinas, super yacht services, and brokerage services. Same-store sales decreased by 11%, largely impacted by weak sales in Florida. However, the company reported consistent adjusted EBITDA of $26.1 million, reflecting strong expense management and diversification strategy. Cash and cash equivalents stood at $145 million, with a debt to EBITDA ratio of just over 1.6x, underscoring their ongoing financial strength. For fiscal 2025, MarineMax expects adjusted EBITDA between $150 million and $180 million, with adjusted net income ranging from $1.80 to $2.80 per diluted share, and consolidated gross margins in the low 30% range. Despite the headwinds, the company remains cautiously optimistic about improved sales in the latter half of the year, with January revenue showing an uptick compared to the prior year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.