MarineMax's (NYSE:HZO) three-year earnings growth trails the 42% YoY shareholder returns

By
Simply Wall St
Published
December 08, 2021
NYSE:HZO
Source: Shutterstock

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the MarineMax, Inc. (NYSE:HZO) share price has flown 184% in the last three years. That sort of return is as solid as granite. It's also good to see the share price up 18% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.

The past week has proven to be lucrative for MarineMax investors, so let's see if fundamentals drove the company's three-year performance.

View our latest analysis for MarineMax

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, MarineMax achieved compound earnings per share growth of 59% per year. This EPS growth is higher than the 42% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.91.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
NYSE:HZO Earnings Per Share Growth December 8th 2021

It is of course excellent to see how MarineMax has grown profits over the years, but the future is more important for shareholders. This free interactive report on MarineMax's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that MarineMax has rewarded shareholders with a total shareholder return of 76% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 22% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before spending more time on MarineMax it might be wise to click here to see if insiders have been buying or selling shares.

We will like MarineMax better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.