NEW YORK ( TheStreet) -- MarineMax (NYSE: HZO) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, generally poor debt management and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to $12.03 million or 77.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.30 is very low and demonstrates very weak liquidity.
  • MARINEMAX INC has improved earnings per share by 31.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MARINEMAX INC turned its bottom line around by earning $0.10 versus -$4.08 in the prior year. For the next year, the market is expecting a contraction of 505.0% in earnings (-$0.41 versus $0.10).
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 29.39%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The revenue growth came in higher than the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

MarineMax, Inc. operates as a recreational boat dealer in the United States. It sells new and used recreational boats, including pleasure boats, such as sport boats, sport cruisers, sport yachts, and yachts; fishing boats; convertible yachts; motor yachts; and ski boats. MarineMax has a market cap of $213.7 million and is part of the services sector and specialty retail industry. Shares are down 1.6% year to date as of the close of trading on Tuesday.

You can view the full MarineMax Ratings Report or get investment ideas from our investment research center.

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