Skip to main content

Analyst gives “top pick” rating for MarineMax stock

MarineMax stock rose 9.3 percent Tuesday as the company announced it had turned its first fourth-quarter profit before an unusual item since 2007, emerging as a “top pick” and leading a B. Riley & Co. analyst to raise his price target for the company’s shares from $16.25 to $20.

Jimmy Baker, who upgraded the company’s stock from “hold” to “buy” in October, wrote in a report released today that a revenue shortfall the company reported Tuesday was more than offset by an “exceptional” gross margin gain of 26.8 percent.

The gain was a welcome surprise because MarineMax has delivered consistently strong top-line results this fiscal year, but margin execution “had been erratic,” Baker wrote.

Recent quarterly reports from MarineMax and Brunswick Corp. have led B. Riley to shift its favor from Brunswick stock to that of MarineMax.

“Throughout the earlier stages of the new boat recovery, which was led by outboard-powered offerings, we generally preferred shares of Brunswick,” which B. Riley downgraded last spring from “buy” status to “neutral,” Baker wrote. “Not necessarily because Brunswick was a better way to gain exposure to the new-boat recovery — frankly, it wasn’t, as Brunswick Corp.’s Boat Group has failed to meaningfully grow sales since 2011 and is still losing money — but rather due to Brunswick Corp.’s operating leverage and cost-cut opportunities out of the 2009 trough, given its excess capacity.”

“Fast forward to today, Brunswick recently reported third-quarter results that featured negative operating leverage while increasing [capital expenditures] to bring on additional outboard capacity,” Baker wrote. “MarineMax is a substantially better pure play on the high-average-selling-price fiberglass inboard cruiser market, given Brunswick has virtually no engine exposure to this category, and just a fraction of its remaining Boat Group is focused on this market. At current levels, we substantially prefer MarineMax.

“Beyond the recent share appreciation, our upgrade thesis is playing out well as [MarineMax] noted that its sales gains in the quarter were entirely the result of improving mix toward larger fiberglass product,” Baker wrote. “We’ll gladly trade unit growth for dollar growth, and apparently so will investors, who bid shares up 9.3 percent.”

MarineMax “has been able to demonstrate growth almost entirely from market share gains,” Baker wrote. “Driving share gains in a declining demand environment made delivering meaningful profitability challenging,” but Baker predicts that the high-average-selling-price fiberglass inboard cruiser market is bouncing off its unit bottom of about 2,100 units, compared with its pre-recession range of between 7,000 and 12,000 units.

— Reagan Haynes



NMMA: Proposed Speed Rule an ‘Existential Threat’ to Industry

The association is calling on every marine brand, employee and boat owner to file public comment by Oct. 31 over a sweeping regulation to protect North Atlantic right whales.


Axopar and Nimbus Renew Agreement

The boatbuilders have entered an agreement whereby Nimbus Group will retain exclusive rights to sell Axopar boats on the Swedish market.


Hurricane Ian Leaves Devastation in Florida

The storm left a wide swath of destruction, heavily impacting marine interests from Tampa Bay to Marco Island.


Email Is Your Ticket to Holiday Sales

Developing an effective email campaign can bolster sales and help fill winter coffers at your dealership.


NMRA Presents Annual Awards

Edson CEO Will Keene and ComMar Sales president Tim Conroy were recognized for their contributions to the marine industry.


DEALERS: Are Interest Rates Impacting Demand?

This month’s Pulse Report survey asks dealers whether interest rate increases are causing a downturn in boat sales. Take the survey here.


EPropulsion, Mack Boring Partner with Crest

Pontoon builder Crest will use an ePropulsion Navy 3.0 Evo electric outboard motor and an E175 battery for its 2023 Current model.


Beneteau Reports Significant H122 Growth

The company reported that its revenue grew 8.6 percent and income increased by 30 percent during the first half of 2022.