Off The Hook YS Inc. (OTH - $2.65 - Buy)
High-Velocity Marine Liquidity Platform Mispriced as Retail | Initiate Buy | PT $10
Rating Buy
Price $2.65
Price Target $10.00
Market Data Market Cap (M) $62.9
Shares Outstanding (M) 23.8
Average Daily Volume (000s) 119.0
Float (M) 3.4
Total Debt (M) $26.6
Net Cash/Debt ($M) $9.3
Dividend NM
General: Pro forma net debt is estimated at approximately $9.3 million, calculated as September 30, 2025 cash of $2.3 million plus $15.0 million in IPO gross proceeds, less total reported debt of $26.6 million. Total debt is comprised of $23.5 million in floorplan notes payable, $2.8 million in lines of credit, and $0.3 million in long-term debt.
| FYE Dec | 2024A | 2025E | 2026E |
|---|---|---|---|
| EPS¹ | 0.05 | 0.04 | 0.12 |
| Revenue ($M) | 98.9 | 110.1 | 145.3 |
¹ The number of shares of the registrant's common stock outstanding as of December 12, 2025 was 23,750,000 shares
Company Description
Off The Hook YS Inc. (OTH) is a vertically integrated marine transaction platform specializing in the wholesale, retail, and financing of pre-owned boats and yachts. Operating across eight locations with over 35 sales representatives, OTH leverages proprietary AI-assisted valuation tools and a data-driven sales engine to provide liquidity and transparency to the marine market. The company generates over $90 million in annual sales through more than 400 transactions per year, earning accolades including Inc. 500's fastest-growing companies and Boating Industry's Top 100 Dealers. OTH's diversified model includes Azure Funding, a high-margin finance division, and WeBuyBoats.com, a direct-to-consumer acquisition channel, positioning it as a leading liquidity provider in the industry.
Key Points
Off The Hook YS Inc. (OTH) looks mispriced as a cyclical marine retailer as OTH is transforming into a high-velocity Marine Liquidity Engine. Trading at approximately 0.35x 2026E Revenue, we think the stock offers value relative to peers. OTH leverages its proprietary WeBuyBoats.com engine and an extensive broker network to source inventory at 15-20% discounts to wholesale value. By providing liquidity to brokers lacking capital, OTH bypasses auction friction to drive gross margins. This advantage enables a 5.0x annual inventory turnover ratemore than double the industry standard. Combined with recurring, high-margin revenue from Azure Funding, we believe this creates a resilient model capable of delivering $140 million to $145 million in 2026 revenue.
2026 Revenue Guidance Analysis Management projects full-year 2026 revenue between $140 million and $145 million. This implies substantial scaling from $82.6 million reported YTD 2025 (up 19.3% YoY). Growth is underpinned by rapid inventory turns and $15 million raised in the November 2025 IPO. These proceeds provide liquidity to service floorplan financing, removing the primary bottleneck that previously constrained acquisition. We view this guidance as conservative given the recent expansion of the broker network to 45 agents.
Operational Performance & Volume Growth Q3 2025 results validate platform scalability. OTH reported a 51% year-over-year increase in boats sold, reaching 112 units despite a challenging macro environment. This volume growth confirms the algorithmic sourcing model effectively captures share from dealers burdened by stagnant inventory. For the first nine months of 2025, OTH generated $8.4 million in Gross Profit (up 20.8% YoY) and maintained positive Net Income of $0.8 million. These figures demonstrate the ability to grow the top line aggressively without sacrificing profitability.
Strategic Positioning & Vertical Integration OTH bifurcates operations to capture value across the market. The core wholesale business provides cash flow velocity, while the newly launched Autograph Yacht Group targets the ultra-high-net-worth segment with high-ticket brokerage transactions. Integrated Azure Funding captures finance spreads on transactions. Additionally, the division markets third-party warranty and insurance products, which serve as ~50% margin add-ons where the company bears no underwriting risk. These high-margin revenue streams flow efficiently to the bottom line, acting as a critical hedge against potential volatility in boat sale margins.
Capital Allocation & Share Repurchase We think disciplined capital allocation is evidenced by the $1.0 million share repurchase program authorized on January 8, 2026. Allocating capital to buybacks shortly after an IPO signals strong insider confidence that the share price is deeply undervalued relative to cash generation potential.
Risks & Corner Conditions Primary risks include interest rate sensitivity and covenant breaches. Interest expenses rose 94% YTD to $1.6 million, reflecting the cost of carrying inventory on floating-rate facilities. However, it is critical to note that floorplan financing is secured by the boats themselves and is non-recourse to the company, differentiating it from traditional corporate debt. If inventory velocity slows below 3.0x due to recession, mandatory curtailment payments could erode working capital. Continued execution on rapid turnover is essential to mitigate leverage risks, in our view.
Summary
We believe OTH represents a unique opportunity to acquire a high-growth platform trading at a distressed valuation. With a revenue trajectory toward $145 million, a proven technology-driven model, and shareholder-aligned capital allocation, we think OTH is poised for a re-rating.
Please see analyst certification and important disclosures below
Important Disclosures Analyst Certification
The analyst, Ashok Kumar, responsible for the preparation of this research report attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers; and (2) that no part of the research analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this research report.
Financial Interests
The analyst, Ashok Kumar, has no financial interest in the debt or equity securities of the subject company of this report. Further, no member of his household has any financial interest in the securities of the subject company. Neither the analyst, nor any member of his household, is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is the subject of this research report. The analyst has not received compensation from the subject company. The CEO of ThinkEquity, LLC., owns shares in the company. At the time of this research report, the analyst does not know, or have reason to know, of any other material conflict of interest.
Company Specific Disclosures
ThinkEquity, LLC is a member of FINRA and SIPC. ThinkEquity, LLC or an affiliate has a client relationship with and has received compensation from this subject company Off the Hook YS Inc. in the last 12 months.
ThinkEquity, LLC
ThinkEquity, LLC is a member of FINRA and SIPC. ThinkEquity expects to receive or intends to seek investment banking business from the subject company in the next three months. ThinkEquity does not make a market in the securities of the subject company of this report at the time of publication. ThinkEquity does not hold a beneficial ownership of more than 1% or more of any class of common equity securities of the subject company.
This report is for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any security. While the information contained in this report has been obtained from sources believed to be reliable, we have not independently verified the information and we do not represent or guarantee that the report is accurate or complete and it should not be relied upon as such. Any references or citations to, or excerpts from, third-party information or data sources (including, but not limited to, Bloomberg and Capital IQ) do not and are not intended to provide financial or investment advice and are not to be relied upon by anyone as providing financial or investment advice. Based on public information available to us, prices and opinions expressed in this report reflect judgments as of the date hereof and are subject to change without notice. The securities covered by or mentioned in this report involve substantial risk and should generally be purchased only by investors able to accept such risk. This research report and the securities mentioned herein, some of which may not be registered under the Securities Act of 1933, are intended only for Qualified Institutional Buyers (QIBs), as defined under Rule 144A. Any opinions expressed assume that this type of investment is suitable for the investor.
Ratings Definitions
ThinkEquity rating definitions are expressed as the total return relative to the expected performance of S&P 500 over a 12-month period.
BUY (B) - Total return expected to exceed S&P 500 by at least 10%
HOLD (H) - Total return expected to be in-line with S&P 500
SELL (S) - Total return expected to underperform S&P 500 by at least 10%
Current Ratings Distribution
This Equity Ratings Distribution reflects the percentage distribution for rated equity securities for the twelve month period June 30, 2019 through June 30, 2020. Within the twelve month period ended June 30, 2020, ThinkEquity, LLC has provided investment banking services to 54% of companies with equity rated a Buy, 0% of companies with equity rated a Hold and 0% of companies with equity rated a Sell. As of June 30, 2020, ThinkEquity, LLC had twentythree stocks under coverage: Buy 23 (100%), Hold 0 (0%), Sell 0 (0%).
