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Here's Why Investors Should Retain Vail Resorts Stock Now
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Vail Resorts, Inc. (MTN - Free Report) is likely to benefit from solid season pass sales, development projects and innovative customer programs. Also, the focus on the Resource Efficiency Transformation Plan bodes well. However, soft demand and weather-related operational disruptions are a concern.
Growth Catalysts for MTN Stock
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 2024/25 North American ski season. Season-to-date (through Sept. 20, 2024), the company stated that Pass product sales had increased by 3% in sales dollars compared with the prior-year period’s (through Sept. 22, 2023) levels. This rise in sales dollars was driven by an 8% price increase for the 2024/2025 season, though partially offset by a higher mix of Epic Day Pass products. Management highlighted that between May 29, 2024, and Sept. 20, 2024, sales trends showed improvement relative to earlier in the year, with unit growth remaining flat and sales dollars growing by about 5% year over year.
Vail Resorts is strategically investing in large-scale projects to enhance its ski resort offerings across North America and Australia. At Park City, the company plans to replace the Sunrise lift with a new 10-person gondola, improving access and accommodating future developments. This upgrade, in partnership with the Canyons Village Management Association, will enhance visitor satisfaction and provide long-term growth opportunities. Meanwhile, in Australia, MTN intends to replace the Mt. Perisher Double and Triple Chairs with a six-person high-speed lift ahead of the 2025 winter season. These investments underscore MTN’s commitment to maintaining its premium status and improving infrastructure at its resorts, positioning the company for continued growth.
In line with its goal of enhancing the customer experience, Vail Resorts is launching My Epic Gear for the 2024-2025 winter season. This innovative program allows members to select their preferred ski or snowboard gear for the season, with flexible delivery options, including slopeside pick-up and drop-off. This initiative, combined with the personalized boot fit scanning technology and high-quality gear offerings, is expected to drive increased customer loyalty and engagement in the upcoming periods.
Vail Resorts has launched a two-year Resource Efficiency Transformation Plan aimed at achieving $100 million in annualized cost efficiencies by fiscal 2026. The plan focuses on scaling operations, implementing a global shared services model and expanding workforce management. The transformation is expected to generate $27 million in savings by fiscal 2025 and $67 million by fiscal 2026.
Concerns for MTN Stock
Image Source: Zacks Investment Research
In the past six months, shares of the company have declined 25.2% against the industry’s growth of 12.1%. The company’s performance was hurt by lower demand for destination mountain travel and weather-related operational disruptions.
In the fiscal fourth quarter, skier visitation fell by 9.5% compared to the previous year due to unfavorable weather across resorts in North America and Australia, as well as broader industry normalization following record visitation during the 2022/2023 ski season. In North America, snowfall at western resorts was down 28% year over year, while eastern U.S. resorts experienced minimal natural snow and variable temperatures.
During the quarter, the company reported underperformance of the Australian winter business. Snowfall at Australian resorts fell 28% from the prior year’s levels and was 44% below the 10-year average. This, combined with softer demand, led to an 18% drop in skier visitation.
Bottom Line
Vail Resorts presents a mixed investment case. On the positive side, the company benefits from solid season pass sales, strategic capital investments and innovative customer offerings like My Epic Gear, which strengthen its long-term growth prospects. Additionally, its Resource Efficiency Transformation Plan aims to deliver cost efficiencies that should likely boost profitability over time.
However, in the short term, investors should note that Vail Resorts is trading at a forward price-to-earnings ratio of 22.48x, higher than the industry average of 17.89x, signaling overvaluation. This premium valuation, combined with challenges such as soft demand and weather-related disruptions, may limit short-term gains, making MTN less attractive compared to other investment opportunities. Nonetheless, for long-term investors, the company's growth initiatives and strategic positioning still make it a worthy hold.
MTN’s Zacks Rank & Key Picks
Vail Resorts currently carries a Zacks Rank #3 (Hold).
Norwegian Cruise Line has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has rallied 20.6% in the past year. The Zacks Consensus Estimate for NCLH’s 2024 sales and earnings per share (EPS) calls for growth of 9.9% and 127.1%, respectively, from the year-ago levels.
DoubleDown Interactive has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 88.1% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Carnival has a trailing four-quarter earnings surprise of 318.1%, on average. The stock has increased 41.9% in the past year. The Zacks Consensus Estimate for CCL’s 2025 sales and EPS indicates an increase of 3.6% and 26%, respectively, from the year-ago levels.
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Here's Why Investors Should Retain Vail Resorts Stock Now
Vail Resorts, Inc. (MTN - Free Report) is likely to benefit from solid season pass sales, development projects and innovative customer programs. Also, the focus on the Resource Efficiency Transformation Plan bodes well. However, soft demand and weather-related operational disruptions are a concern.
Growth Catalysts for MTN Stock
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 2024/25 North American ski season. Season-to-date (through Sept. 20, 2024), the company stated that Pass product sales had increased by 3% in sales dollars compared with the prior-year period’s (through Sept. 22, 2023) levels. This rise in sales dollars was driven by an 8% price increase for the 2024/2025 season, though partially offset by a higher mix of Epic Day Pass products. Management highlighted that between May 29, 2024, and Sept. 20, 2024, sales trends showed improvement relative to earlier in the year, with unit growth remaining flat and sales dollars growing by about 5% year over year.
Vail Resorts is strategically investing in large-scale projects to enhance its ski resort offerings across North America and Australia. At Park City, the company plans to replace the Sunrise lift with a new 10-person gondola, improving access and accommodating future developments. This upgrade, in partnership with the Canyons Village Management Association, will enhance visitor satisfaction and provide long-term growth opportunities. Meanwhile, in Australia, MTN intends to replace the Mt. Perisher Double and Triple Chairs with a six-person high-speed lift ahead of the 2025 winter season. These investments underscore MTN’s commitment to maintaining its premium status and improving infrastructure at its resorts, positioning the company for continued growth.
In line with its goal of enhancing the customer experience, Vail Resorts is launching My Epic Gear for the 2024-2025 winter season. This innovative program allows members to select their preferred ski or snowboard gear for the season, with flexible delivery options, including slopeside pick-up and drop-off. This initiative, combined with the personalized boot fit scanning technology and high-quality gear offerings, is expected to drive increased customer loyalty and engagement in the upcoming periods.
Vail Resorts has launched a two-year Resource Efficiency Transformation Plan aimed at achieving $100 million in annualized cost efficiencies by fiscal 2026. The plan focuses on scaling operations, implementing a global shared services model and expanding workforce management. The transformation is expected to generate $27 million in savings by fiscal 2025 and $67 million by fiscal 2026.
Concerns for MTN Stock
Image Source: Zacks Investment Research
In the past six months, shares of the company have declined 25.2% against the industry’s growth of 12.1%. The company’s performance was hurt by lower demand for destination mountain travel and weather-related operational disruptions.
In the fiscal fourth quarter, skier visitation fell by 9.5% compared to the previous year due to unfavorable weather across resorts in North America and Australia, as well as broader industry normalization following record visitation during the 2022/2023 ski season. In North America, snowfall at western resorts was down 28% year over year, while eastern U.S. resorts experienced minimal natural snow and variable temperatures.
During the quarter, the company reported underperformance of the Australian winter business. Snowfall at Australian resorts fell 28% from the prior year’s levels and was 44% below the 10-year average. This, combined with softer demand, led to an 18% drop in skier visitation.
Bottom Line
Vail Resorts presents a mixed investment case. On the positive side, the company benefits from solid season pass sales, strategic capital investments and innovative customer offerings like My Epic Gear, which strengthen its long-term growth prospects. Additionally, its Resource Efficiency Transformation Plan aims to deliver cost efficiencies that should likely boost profitability over time.
However, in the short term, investors should note that Vail Resorts is trading at a forward price-to-earnings ratio of 22.48x, higher than the industry average of 17.89x, signaling overvaluation. This premium valuation, combined with challenges such as soft demand and weather-related disruptions, may limit short-term gains, making MTN less attractive compared to other investment opportunities. Nonetheless, for long-term investors, the company's growth initiatives and strategic positioning still make it a worthy hold.
MTN’s Zacks Rank & Key Picks
Vail Resorts currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , DoubleDown Interactive Co., Ltd. (DDI - Free Report) and Carnival Corporation & plc (CCL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Norwegian Cruise Line has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has rallied 20.6% in the past year. The Zacks Consensus Estimate for NCLH’s 2024 sales and earnings per share (EPS) calls for growth of 9.9% and 127.1%, respectively, from the year-ago levels.
DoubleDown Interactive has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 88.1% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Carnival has a trailing four-quarter earnings surprise of 318.1%, on average. The stock has increased 41.9% in the past year. The Zacks Consensus Estimate for CCL’s 2025 sales and EPS indicates an increase of 3.6% and 26%, respectively, from the year-ago levels.