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Here's Why You Should Retain Vail Resorts (MTN) Stock Now
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Vail Resorts, Inc. (MTN - Free Report) is likely to benefit from solid season pass sales, digital initiatives and expansion projects. Also, focus on the new membership program bodes well. However, weather disruptions and high operating costs are a concern.
Let us discuss the factors that suggest why investors should retain the stock for the time being.
Growth Catalysts
Vail Resorts has benefited from its offerings such as Epic Pass, Epic Day Pass and Epic Coverage and the introduction of Epic Mountain Rewards. The company reported solid season pass sales for the 2023/24 North American ski season. Season-to-date (through Sep 22, 2023), the company stated that Pass product sales had increased approximately 7% in units and about 11% in sales dollars compared with the prior-year period’s (through Sep 23, 2022) levels. The company reported strong unit growth concerning its renewing pass holders in destination markets. Also, it stated benefits from an 8% price increase (relative to the 2022/23 season).
Increased focus on digital initiatives bodes well. During the fourth quarter of fiscal 2023, the company launched the My Epic app. It initiated work on network-wide scalable technology that will enhance analytics, e-commerce and guest engagement tools. The initiative will likely pave a path to target guest outreach, personalize messages and improve conversion.
The company is exclusively piloting a program for My Epic Gear at Vail, Beaver Creek, Breckenridge and Keystone resorts for a selective group of pass holders during the 2023/2024 North American ski season. This initiative paves the path for a hassle-free membership program for gear ownership at reduced costs.
The company continues to reinvest in its resorts to boost customer traffic. For the calendar year 2023, the company plans to increase lift capacity and enhance the guest experience. The plan includes the installation of new or replacement lifts at Keystone Mountain Resort, Breckenridge, Whistler Blackcomb, Stevens Pass and Attitash. The company anticipates the projects to be completed in time for the 2023/2024 North American winter season.
Concerns
Image Source: Zacks Investment Research
In the past six months, shares of the company have declined 13.3% compared with the industry’s 3.1% fall. The company’s performance was hurt by lower demand for destination mountain travel and weather-related operational disruptions. This and softness in ancillary business and cost inflations added to the downside.
In the fiscal fourth quarter, the mountain segment’s labor-related costs increased 26.3% compared with the prior-year quarter’s levels. The segment's operating expenses increased 22.4% year over year due to investments in employee wages and salaries, the impact of inflation and incremental expenses associated with Andermatt-Sedrun and the Seven Springs Resorts. Moving ahead, the company anticipates the inflationary costs to persist for some time.
Zacks Rank & Key Picks
Vail Resorts currently carries a Zacks Rank #3 (Hold).
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased by 11.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 33.6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) carries a Zacks Rank #2 (Buy). HLT has a trailing four-quarter earnings surprise of 12.5% on average. Shares of the company have gained 24.4% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS indicates a rise of 14.8% and 23.7%, respectively, from the year-ago period’s levels.
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Here's Why You Should Retain Vail Resorts (MTN) Stock Now
Vail Resorts, Inc. (MTN - Free Report) is likely to benefit from solid season pass sales, digital initiatives and expansion projects. Also, focus on the new membership program bodes well. However, weather disruptions and high operating costs are a concern.
Let us discuss the factors that suggest why investors should retain the stock for the time being.
Growth Catalysts
Vail Resorts has benefited from its offerings such as Epic Pass, Epic Day Pass and Epic Coverage and the introduction of Epic Mountain Rewards. The company reported solid season pass sales for the 2023/24 North American ski season. Season-to-date (through Sep 22, 2023), the company stated that Pass product sales had increased approximately 7% in units and about 11% in sales dollars compared with the prior-year period’s (through Sep 23, 2022) levels. The company reported strong unit growth concerning its renewing pass holders in destination markets. Also, it stated benefits from an 8% price increase (relative to the 2022/23 season).
Increased focus on digital initiatives bodes well. During the fourth quarter of fiscal 2023, the company launched the My Epic app. It initiated work on network-wide scalable technology that will enhance analytics, e-commerce and guest engagement tools. The initiative will likely pave a path to target guest outreach, personalize messages and improve conversion.
The company is exclusively piloting a program for My Epic Gear at Vail, Beaver Creek, Breckenridge and Keystone resorts for a selective group of pass holders during the 2023/2024 North American ski season. This initiative paves the path for a hassle-free membership program for gear ownership at reduced costs.
The company continues to reinvest in its resorts to boost customer traffic. For the calendar year 2023, the company plans to increase lift capacity and enhance the guest experience. The plan includes the installation of new or replacement lifts at Keystone Mountain Resort, Breckenridge, Whistler Blackcomb, Stevens Pass and Attitash. The company anticipates the projects to be completed in time for the 2023/2024 North American winter season.
Concerns
Image Source: Zacks Investment Research
In the past six months, shares of the company have declined 13.3% compared with the industry’s 3.1% fall. The company’s performance was hurt by lower demand for destination mountain travel and weather-related operational disruptions. This and softness in ancillary business and cost inflations added to the downside.
In the fiscal fourth quarter, the mountain segment’s labor-related costs increased 26.3% compared with the prior-year quarter’s levels. The segment's operating expenses increased 22.4% year over year due to investments in employee wages and salaries, the impact of inflation and incremental expenses associated with Andermatt-Sedrun and the Seven Springs Resorts. Moving ahead, the company anticipates the inflationary costs to persist for some time.
Zacks Rank & Key Picks
Vail Resorts currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 34.6% on average. Shares of LYV have increased by 11.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 21.6% and 59.4%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 33.6% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) carries a Zacks Rank #2 (Buy). HLT has a trailing four-quarter earnings surprise of 12.5% on average. Shares of the company have gained 24.4% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS indicates a rise of 14.8% and 23.7%, respectively, from the year-ago period’s levels.