Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- MarineMax (NYSE: HZO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and generally higher debt management risk.
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- MARINEMAX INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MARINEMAX INC turned its bottom line around by earning $0.04 versus -$0.51 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus $0.04).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 195.6% when compared to the same quarter one year prior, rising from $4.61 million to $13.64 million.
- The gross profit margin for MARINEMAX INC is currently lower than what is desirable, coming in at 27.61%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.75% trails that of the industry average.
- Net operating cash flow has significantly decreased to $5.97 million or 54.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.