MarineMax (HZO -5.81%) -- the self-described "world's largest recreational boat, yacht, and superyacht company" -- delivered record revenue and gross margin in its fiscal 2023's first quarter, ended Dec. 31, 2022. Intent on helping folks have fun on the water, its company motto is, "We don't just sell boats, we sell boating."  

Although its stock is down more than 60% from its May 2021 all-time high north of $70 a share (now trading around $27-$28 a share), MarineMax stock could prove to be a worthwhile investment for long-term shareholders. And with fiscal Q2 earnings coming out next week, it's a good time to review Q1's performance to better gauge company progress.

Here's why I think the stock is worth putting on your watch list.

A diversified recreational boating company

MarineMax likes to point out that "land comprises 29% of the earth's surface. We're focused on the other 71%." 

The Clearwater, Florida-based company operates a multitude of segments within the marine sector -- as a retailer of recreational boats and yachts, provider of concierge and superyacht services, developer of boat booking and purchasing software, manufacturer of boats, and manager of marinas. The company owns 125 locations across the globe, including 78 dealerships and 57 marinas. 

On top of all that, MarineMax also offers yacht charter vacations in the British Virgin Islands, providing its guests "the luxury boating adventures of a lifetime." For a company involved in so many aspects of the recreational boating market, is MarineMax a good investment?

In its "strong start to fiscal 2023," as CFO Mike McLamb described it during the Q1 earnings call, MarineMax generated a record $508 million in revenue. In another quarterly record, gross profit margin reached 36.8% in the first quarter.

Full-year guidance was recently lowered

Despite setting new records for revenue and gross profit margin in Q1, MarineMax reported disappointing adjusted earnings per diluted share of $1.24, a 24% year-over-year decline. As a result, the company reduced its guidance for fiscal 2023, lowering its full-year adjusted earnings per diluted share expectation from between $7.90 and $8.40 to between $6.90 and $7.40.

Another factor to consider here is that MarineMax was only able to generate such high revenue in Q1 due to its acquisition of IGY Marinas last October. The combined revenue contributions of IGY Marinas as well as Intrepid Powerboats and Cruisers Yachts, two boat manufacturers purchased in 2021, bolstered Q1's number significantly.

Taking those three recent acquisitions out of the equation, same-store sales actually declined by 1% in the first fiscal quarter. And while MarineMax endured a "substantial" unit volume drop in Q1, McLamb explained that it "was less than that of the industry, indicating share gains."

Resilient in times of economic uncertainty

One of MarineMax's main advantages is its focus on high-end products, which helped keep volume declines under control in Q1. With more exposure to the larger luxury end of the boating market, MarineMax was able to increase its average unit selling price substantially.

According to McLamb, "a greater mix of larger, more premium product" helped drive this expansion in selling price. MarineMax has recently prioritized growing the higher-margin segments of its business, helping to eliminate its dependence on new boat sales. 

And with the acquisition of Midcoast Construction Enterprises, announced late last year, MarineMax will further leverage its presence in the marine industry by developing waterfront real estate. This purchase enables MarineMax to build new marinas and associated operations and also provides access to the labor and equipment required to maintain existing marinas.

What to watch for

Currently trading at a modest 3.4 price-to-earnings ratio and with $178 million in cash on the balance sheet, MarineMax presents an interesting long-term investment case. Investors should watch for continued revenue growth, also keeping a close eye on margins to ensure profitability doesn't slip by the wayside.  

For reference, industry competitors Malibu Boats, Marine Products Corporation, and MasterCraft Boat Holdings all have P/E ratios more than twice that of MarineMax.

If MarineMax can leverage its recent entry into the marina development industry over time, while effectively managing its boat sales, marina, manufacturing, and charter operations, expect to see big things from this recreational boating dynasty.