MarineMax, Inc. (NYSE:HZO) may not have the largest market cap, but it has seen a decent 17% share price increase over the past few months on the NYSE. Shareholders may appreciate the recent jump in share price, but the company still has a long way to go before it can reclaim its yearly highs. With many analysts covering the stock, we can assume that any price-relevant announcements have already been factored into the share price. But what if the stock is still a bargain? Today, we will analyze the latest data on MarineMax’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for MarineMax
Is MarineMax still cheap?
The share price currently appears reasonable, according to our price multiple model, where we compare the company’s price-to-earnings ratio to the industry average. In this case, we used the price-to-earnings (P/E) ratio because there isn’t enough information to reliably predict the stock’s cash flows. We note that MarineMax’s ratio of 14x is slightly below its industry peers’ ratio of 16.74x, meaning that if you buy MarineMax today, you’d be paying a reasonable price for it. And if you believe MarineMax should trade at these levels for the long term, then there’s not much upside to gain against other industry peers. Is there another opportunity to buy cheap in the future? Since MarineMax’s share price is quite volatile, we could potentially see a decline (or a rise) in the future, giving us another opportunity to buy. This is based on its high beta, which is a good indicator of how much the stock moves relative to the rest of the market.
What kind of growth will MarineMax generate?
Investors seeking growth in their portfolio should consider a company’s prospects before buying its shares. Although value investors would argue that intrinsic value relative to price is most important, high growth potential at a cheap price would be a more compelling investment thesis. With earnings expected to grow 53% over the next few years, the future looks bright for MarineMax. It looks like higher cash flow is on the horizon for the stock, which should lead to a higher share valuation.
What this means for you
Are you a shareholder? It seems like the market has already priced in HZO’s positive outlook, with shares trading around industry multiples. However, there are other important factors we haven’t considered today, such as the track record of the management team. Have these factors changed since you last covered HZO? Will you have enough confidence to invest in the company if the price falls below the industry P/E?
Are you a potential investor? If you’ve been keeping an eye on HZO, now may not be the best time to buy, with the stock trading around industry price multiples. However, the positive outlook is encouraging for HZO, meaning it’s worth taking a closer look at other factors such as the strength of its balance sheet in order to take advantage of the next price dip.
If you want to learn more about MarineMax as a company, it is important to be aware of the risks the company faces. A typical example: We have 4 warning signs for MarineMax You should be aware of this and one of them is a little uncomfortable.
If you are no longer interested in MarineMax, you can view our list of over 50 other stocks with high growth potential on our free platform.
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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
