A month has gone by since the last earnings report for Marriott Vacations Worldwide (VAC Quick QuoteVAC - Free Report) . Shares have added about 0.3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Marriott due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Marriott Vacations Q3 Earnings Beat Estimates, Rise Y/Y

Marriott Vacations reported impressive third-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.

Earnings & Revenues Discussion

During third-quarter 2022, the company reported adjusted earnings per share (EPS) of $3.02, surpassing the Zacks Consensus Estimate of $2.63 by 14.8%. In the year-ago quarter, the company reported an adjusted EPS of $1.60.

Quarterly revenues of $1,252 million beat the consensus mark of $1,199 million. The top line increased 19% on a year-over-year basis.

Segmental Performances

Vacation Ownership: During the third quarter, revenues in the segment (excluding the impact of Alignment) totaled $1,182 million compared with $974 million reported in the prior-year quarter.

The segment’s adjusted EBITDA (including the impact of Alignment) came in at $255 million, compared with $215 million reported in the prior year quarter.

Exchange & Third-Party Management: The segment’s revenues totaled $71 million in the third quarter compared with $77 million in the prior-year quarter. Revenues, excluding cost reimbursements, fell 3% year over year.

During the third quarter, interval international active members increased 21% year over year to 1.6 million, while average revenues per member declined 9% on a year-over-year basis. The segment’s adjusted EBITDA (including the impact of Alignment) came in at $39 million compared with the $35 million reported in the prior-year quarter.

Corporate and Other Results

During the third quarter, general and administrative costs increased by $8 million year over year, owing to higher compensation and transformational initiative expenses (including procurement and artificial intelligence capabilities).

Expenses & EBITDA

During the quarter, total expenses (including the impact of alignment adjustments) came in at $1,029 million compared with $896 million reported in the year-ago quarter.

The company’s adjusted EBITDA (including the impact of alignment adjustments) in the third quarter amounted to $240 million compared with $205 million reported in the year-ago quarter.

Balance Sheet

As of Sep 30, 2022, the company’s cash and cash equivalents were $294 million compared with $324 million as of Jun 30, 2022.

At the end of the third quarter, the company had $2.7 billion of net corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.

During the quarter, the company repurchased 1.7 million shares of its common stock worth approximately $216 million.

2022 Outlook

For 2022, the company anticipates contract sales in the range of $1,820-$1,860 million compared with the prior estimate of $1,775-$1,875 million. Adjusted free cash flow is projected in the range of $670-$730 million, up from the earlier estimate of $650-$730 million. Adjusted EBITDA is expected to be between $950 million and $975 million, up from the prior estimate of $880-$930 million. Adjusted fully-diluted EPS for 2022 is expected to be between $10.20 and $10.64 compared with the prior estimate of $9.47-$10.35 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

At this time, Marriott has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Marriott has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Marriott belongs to the Zacks Hotels and Motels industry. Another stock from the same industry, Hilton Worldwide Holdings Inc. (HLT Quick QuoteHLT - Free Report) , has gained 3.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Hilton Worldwide Holdings Inc. reported revenues of $2.37 billion in the last reported quarter, representing a year-over-year change of +35.4%. EPS of $1.31 for the same period compares with $0.78 a year ago.

For the current quarter, Hilton Worldwide Holdings Inc. is expected to post earnings of $1.22 per share, indicating a change of +69.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Hilton Worldwide Holdings Inc. Also, the stock has a VGM Score of B.