MarineMax (HZO) Stock Trades Up, Here Is Why

Radek Strnad /
2024/06/03 11:22 am EDT

What Happened:

Shares of boat and marine products retailer MarineMax (NYSE:HZO) jumped 24.5% in the morning session after Bloomberg reported that OneWater Marine is in talks to buy the company (MarineMax). According to the sources, OneWater made a $40 a share offer for MarineMax which implied a $2.5 billion valuation (inclusive of debt) for the combined company. Following the development, OneWater provided an update in a press release adding, "As a matter of policy, we do not comment on market rumors or speculation...OneWater has a strong balance sheet and will continue to prioritize judicious capital allocation and maintain appropriate levels of leverage while evaluating strategic opportunities, enabling us to ensure the short-term, medium-term, and long-term viability of our business. Management and the Board of Directors are extremely focused on preserving and enhancing shareholder value. They are squarely aligned with shareholders given that insiders collectively hold a 17% interest in the company."

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What is the market telling us:

MarineMax's shares are not very volatile than the market average and over the last year have had only 21 moves greater than 5%. Moves this big are very rare for MarineMax and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was about a month ago, when the stock dropped 16.7% on the news that the company reported first quarter results with revenue and EPS missing analysts as its same-store sales fell short of analysts' expectations (2% vs estimates of 4%). Management was forced to use more aggressive promotional activity to stimulate demand as it cited a challenging market environment; there was an industrywide decline in boat registrations this quarter. As a result of the macroeconomic softness, MarineMax significantly lowered its full-year earnings forecast (EPS and EBITDA), missing Wall Street's estimates. During the quarter, the company completed its acquisition of William Tenders USA, a luxury yacht tender. Overall, this was a bad quarter for MarineMax.

MarineMax is down 9.5% since the beginning of the year, and at $35.16 per share it is trading 13.6% below its 52-week high of $40.71 from July 2023. Investors who bought $1,000 worth of MarineMax's shares 5 years ago would now be looking at an investment worth $2,205.

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