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Vail Resorts (MTN) Up 8.4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Vail Resorts (MTN - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.

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

Vail Resorts’ Earnings & Revenues Beat Estimates in Q2

Vail Resorts reported better-than-expected results in second-quarter fiscal 2019. Adjusted earnings of $5.02 per share beat the Zacks Consensus Estimate of $4.91 by 2.2%. However, it declined 11.5% from the year-ago quarter.

Quarterly revenues of $849.6 million surpassed the consensus mark of $826 million and increased 15.7% on a year-over-year basis.

Segment Results

Vail Resorts has two reporting segments — Mountain (91.4% in second-quarter fiscal 2019) and Lodging (8.6%).

The Mountain segment reported revenues of $776.1 million in the quarter, up 15.7% year over year mainly driven by higher sales from Triple Peaks and Stevens Pass and increased lift, ski and rental revenues.

EBITDA increased to$352.2 million or 15.4% for the segment from the prior-year quarter. Operating expenses at the Mountain segment totaled $424 million, up 15.9% year over year.

Lodging net revenues in the reported quarter were$73.2 million, up 15.3% year over year on an increase in hotel room and dining sales.

Under the segment, EBITDA increased to $5.8 million or 57% from the prior-year quarter. Operating expenses at the Lodging segment rose12.7% year over year to $67.5 million.

Operating Results

Vail Resorts’ resort reported EBITDA gain of $358 million in the quarter under review compared with $309 million a year ago.

Resort operating expenses totaled $491.5 million, up 6.8% year over year. Total segment operating expenses increased 6.6% year over year to $492.9 million.

Balance Sheet

Cash and cash equivalents as of Jan 31, 2019, came in at $158.6 million. Net long-term debt as of Jan 31, 2019, was $1,345 million.

The company approved an increase in quarterly cash dividend of 20% to $1.76 per share, which will be payable on Apr 11, 2019, to shareholders on record as of Mar 27, 2019.

In the second quarter of fiscal 2019, the company repurchased 155,111 shares at an average price of $225.64 for a total of approximately $35 million.

Fiscal 2019 Guidance

For fiscal 2019, Vail Resorts’ resort EBIDTA is estimated at $690-$710million, down from the previously announced range of $718-$750 million. Net income is projected in the range of $268-$300 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Vail Resorts has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

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




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