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 growth in earnings per share, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and generally poor debt management. Highlights from the ratings report include:
- MARINEMAX INC has improved earnings per share by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARINEMAX INC swung to a loss, reporting -$0.51 versus $0.10 in the prior year. This year, the market expects an improvement in earnings (-$0.29 versus -$0.51).
- The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 10.4% when compared to the same quarter one year prior, going from -$4.70 million to -$4.21 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.8%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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.
- The gross profit margin for MARINEMAX INC is currently lower than what is desirable, coming in at 27.90%. 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, HZO's net profit margin of -4.60% significantly underperformed when compared to the industry average.