Simple Concepts Research Group

What You Need To Know Before Buying OneWater (NASDAQ: ONEW)

by | Jan 5, 2022 | Stock Picks

OneWater Marine (ONEW) Company Overview & Stock Price Forecast

This article provides a brief analysis and stock rating for OneWater Marine (ONEW) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.

OneWater Marine Fundamentals

ONEW Stock Rating

Stock Price Target: $71.28

In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for OneWater Marine in comparison to the Automotive Retail industry and the S&P 500.

OneWater Marine is a Small Cap company with a Market Cap of $902.9M.

How are investors using OneWater Marine earnings yield to assess the company?

OneWater Marine (ONEW)_ Earnings Yield in Comparison to the Auto Retail Industry, S&P 500 and 10 Year Treasury Rate

The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).

The current earnings yield for OneWater Marine is 24.75%, in comparison to 3.33% for the S&P 500 and 1.52% for the 10-year treasury bond. The median earnings yield for the Auto Retail industry is 5.74%.

What does OneWater Marine Price-to-Earnings Ratio (P/E) tell investors about the company?

OneWater Marine (ONEW)_ Price-to-Earnings, Price-to-Sales and Price-to-Book Value in Comparison to the Auto Retail Industry and the S&P 500

The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings. 

OneWater Marine is currently trading at a P/E of 8.71. The P/E for the Auto Retail industry is 17.23 and the P/E for the S&P 500 is 30.02.

What is the current Price-to-Sales Ratio (P/S) for OneWater Marine?

The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.

OneWater Marine is currently trading at a P/S of 0.55. The P/S for the Auto Retail industry is 0.86 and the P/S for the S&P 500 is 3.26.

How does OneWater Marine Price-to-BookRatio (P/B) compare to the Automotive Retail industry?

Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.

OneWater Marine P/B ratio is 3.54. The P/B for the Auto Retail industry is 5.99 and the P/B for the S&P 500 is 4.91.

How attractive is OneWater Marine Return on Invested Capital (ROIC) to investors?

OneWater Marine (ONEW)_ Return on Invested Capital in Comparison to the Auto Retail Industry and the S&P 500

Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.

Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.

OneWater Marine ROIC is currently 25.74% in comparison to 23.78% for the Auto Retail industry and 8.60% for the S&P 500.

OneWater Marine (ONEW)_ Price Target & 52-Week Price Range

How has ONEW stock performed over the past year? What is the current analyst price target?

Over the past 52 weeks, OneWater Marine has traded between the range of $27.21 and $62.79.

The current Analyst Price Target for OneWater Marine is $71.28.

What is OneWater Marine YoY Performance in comparison to its industry and the total market?

The year-over-year (YoY) performance is the amount of profit/loss realized by a stock over a one year period from the present date.

The YoY performance for OneWater is 91.61%. The Auto Retail industry has a YTD performance of 44.90% in comparison to the YTD S&P 500 performance of 27.62%.

OneWater Marine (ONEW)_ YoY Performance in Comparison to the Auto Retail Industry and the S&P 500

Recent Financial Results (Full Year 2021)

  • Record revenue reported of $1.23B, an increase of 20% in comparison to 2020
  • Gross profit margin expanded 610 basis points to 29%
  • Net income increased 140% to $116M
  • Net income per diluted share attributable to OneWater was $6.96
  • Adjusted EBITDA increased 88% to $156M
  • Completed 5 strategic acquisitions with 3 additional expected to close in the Q1 2022

Stock Price Target: $71.28

Company Overview

ONEW Stock Rating

OneWater Marine operates as a recreational boat retailer in the US. The company offers new and pre-owned recreational boats and yachts, as well as related marine products, such as parts and accessories. It also provides boat repair and maintenance services. In addition, the company arranges boat financing and insurance; and other ancillary services, including indoor and outdoor storage, and marina, as well as rental of boats and personal watercraft.

As of September 2021, it operated 70 stores in 11 states, including Texas, Florida, Alabama, North Carolina, South Carolina, Georgia, Ohio and New Jersey. OneWater Marine Inc. was founded in 2014 and is headquartered in Buford, Georgia. The current CEO is Austin Singleton.

Be sure to add OneWater Marine (ONEW) to your Watch List and if you haven’t done so already, check in on the performance of our Current Portfolio. Keep it simple and always do your due diligence.

This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.