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Shares of MarineMax (HZO) have been strong performers lately, with the stock up 37.8% over the past month. The stock hit a new 52-week high of $31.57 in the previous session. MarineMax has gained 87% since the start of the year compared to the 27.7% move for the Zacks Retail-Wholesale sector and the -1.7% return for the Zacks Retail - Miscellaneous industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 23, 2020, MarineMax reported EPS of $1.58 versus consensus estimate of $0.73 while it beat the consensus revenue estimate by 19.41%.
For the current fiscal year, MarineMax is expected to post earnings of $2.54 per share on $1.43 billion in revenues. This represents a 55.83% change in EPS on a 15.92% change in revenues. For the next fiscal year, the company is expected to earn $2.27 per share on $1.41 billion in revenues. This represents a year-over-year change of -10.47% and -1.68%, respectively.
MarineMax may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
MarineMax has a Value Score of A. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 17.4X versus its peer group's average of 6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, MarineMax currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if MarineMax meets the list of requirements. Thus, it seems as though MarineMax shares could have a bit more room to run in the near term.
How Does MarineMax Stack Up to the Competition?
Shares of MarineMax have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Dollar General (DG), Lithia Motors (LAD), and OReilly Automotive (ORLY), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for MarineMax. Still, the fundamentals for MarineMax are promising, and it still has potential despite being at a 52-week high.
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MarineMax, Inc. (HZO) : Free Stock Analysis Report
OReilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
Dollar General Corporation (DG) : Free Stock Analysis Report
Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
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