NEW YORK (TheStreet) -- MarineMax (NYSE:HZO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself, generally weak debt management and poor profit margins. Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$16.22 million or 2936.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- HZO's debt-to-equity ratio of 0.68 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.19 is very low and demonstrates very weak liquidity.
- HZO has underperformed the S&P 500 Index, declining 20.84% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for MARINEMAX INC is currently lower than what is desirable, coming in at 29.60%. Regardless of HZO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -4.60% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market, MARINEMAX INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff
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