The Chilly Slope of Financial Performance
Vail Resorts (MTN) may be hitting a rough patch lately, with its stock struggling to ascend to the dazzling heights of 2021.
An Avalanche of Company Details
Founded back in 1845, Vail Resorts, headquartered in Broomfield, CO, operates under three distinct segments: Mountain, Lodging, and Real Estate.
While the company raked in around 88% of its 2023 revenue from the mountain segment, lodging and real estate contributed around 12% and 0.3%, respectively.
With a valuation of $8 billion and a Forward PE of 28, MTN might not be everyone’s cup of tea, especially for those seeking value. However, the stock’s growth potential is something worth pondering over, especially since a dividend hike has upped the yield to about 4%.
A Bumpy Ride in Earnings
Vail Resorts has had a challenging time meeting earning expectations, having missed the mark for six consecutive quarters. The latest shortfall of 5% in March 2024, coupled with a reduced full-year outlook, added to the company’s woes.
Despite citing weather disruptions as a major factor, the management remains optimistic about the upcoming months. Unfortunately, analysts are yet to be convinced, with estimates continually heading south.
Plummeting Earnings Estimates
Over the last 30 days, there has been a significant decline in earnings estimates: from $10.69 to $10.08 for the current quarter, and from $8.95 to $7.90 for the entire year. The outlook for the next year isn’t looking rosier either.
Technical Turbulence
Post-COVID, the stock witnessed a rollercoaster ride, plummeting to $125 before soaring to $375. Currently trading in a range of $200-260, the stock’s moving averages pose a puzzle for investors.
What Lies Ahead?
Whether you blame it on climate change or mere bad luck, Vail Resorts is facing an uphill battle in attracting visitors to its mountains.
Investors might be better off exploring other leisure and recreation options, like Royal Caribbean Cruises (RCL), which seems to be cruising towards a brighter financial future with a Zacks Rank #2 (Buy).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
