Is Marine Products Corporation (NYSE:MPX) too expensive at 34.00x Price To Earnings?


Marine Products Corporation (NYSE:MPX) is currently trading at $17.33, at approximately 76.6% of its 52-week high of $22.61. With the stock price up 33.5% in the last year, investors are worried that the company is getting too expensive. So, is Marine Products Corporation overvalued? In this article, we’ll discuss Marine Products Corporation’s valuation using different valuation models.

Historical Valuation

One of the quickest ways to spot if a company is getting too expensive is to compare the current valuation to its historical one. We can use the price to sales ratio to cut the noise and avoid the volatility of the company’s earnings.

Considering Marine Products Corporation’s latest twelve months revenue/share of $6.49 and using the company’s 5-year average price to sales of 1.78x as a benchmark, we have a fair value of $11.53, which is -33.5% lower than the current price.

With no surprise, we can see that Marine Products Corporation’s price to sales of 2.7x is much higher than its 5-year average of 1.8x, indicating that the company is probably trading in overbought territory. We can easily visualize trends in the company’s fundamentals using the Finbox chart editor, as depicted below.

Source: Finbox Chart Engine

Absolute Valuation: Marine Products Corporation DCF Analysis

Using a company’s historical valuation as a benchmark could lead to misleading results if a change in its fundamentals justifies the current valuation. So it’s always preferable to take into account the latest financial forecast and analyze the company with an absolute valuation model.

So, let’s analyze Marine Products Corporation with a 5Y DCF analysis (EBITDA exit method). Using the latest 5Y revenue forecast CAGR of 2.3%, an average EBITDA margin forecast of 12.5%, a discount rate of 11.5%, and a terminal EBITDA multiple of 17.4x, we get a fair value of $17.2.

So, Is Marine Products Corporation Overvalued?

Relying only on one or two financial models to determine a company’s fair value is never a good idea. It’s always preferable to use different models before coming to hasty conclusions.

The Finbox Fair Value Estimate is an advanced financial modeling technology that uses eleven different models to estimate the fair value of a stock and lets you get a company’s fair value at your fingertips. All the models are based on the same data utilized by the biggest investment banks and money managers in the world.

According to the estimate, Marine Products Corporation’s fair value is $13.49, representing a -22.2% downside from the current price. Below are the fair value estimates for each model.

Source: Finbox Fair Value Estimates

Company’s Profile: Marine Products Corporation

Marine Products Corporation designs, manufactures, and sells recreational fiberglass powerboats for the sportboat, jet boat, and sport fishing markets worldwide.

It offers Chaparral sterndrive pleasure boats, including SSi Sport, Ski and Fish Boats, SSX Sport Boats, and the Surf Series; Chaparral outboard pleasure boats within the SSi and SSX, SunCoast, and OSX Sport Luxury models; Robalo outboard sport fishing boats; and Vortex jet boats under the Chaparral brand name.

The company also provides center consoles, dual consoles, and Cayman Bay Boats under the Robalo brand name. It sells its products to a network of 195 domestic and 93 international independent authorized dealers. Marine Products Corporation was founded in 1965 and is based in Atlanta, Georgia.

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