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Category: Stock Market and Vail Resorts
Date: 28 September 2019 Stock Price: $236.98 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Vail Resorts a leading global mountain resort operator operating 37 mountain resorts.
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About Vail Resorts
Vail Resorts, Inc., through its subsidiaries, is the leading global mountain resort operator. Vail Resorts' subsidiaries operate 37 world-class mountain resorts and urban ski areas, including Vail, Beaver Creek, Breckenridge, Keystone and Crested Butte in Colorado; Park City in Utah; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in British Columbia, Canada; Perisher, Falls Creek and Hotham in Australia; Stowe, Mount Snow, Okemo in Vermont; Hunter Mountain in New York; Mount Sunapee, Attitash, Wildcat and Crotched in New Hampshire; Stevens Pass in Washington; Liberty, Roundtop, Whitetail, Jack Frost and Big Boulder in Pennsylvania; Alpine Valley, Boston Mills, Brandywine and Mad River in Ohio; Hidden Valley and Snow Creek in Missouri; Wilmot in Wisconsin; Afton Alps in Minnesota; Mt. Brighton in Michigan; and Paoli Peaks in Indiana. Vail Resorts owns and/or manages a collection of casually elegant hotels under the RockResorts brand, as well as the Grand Teton Lodge Company in Jackson Hole, Wyoming. Vail Resorts Development Company is the real estate planning and development subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN)
Overview of Vail Resorts' latest earnings report
The numbers we are interested in (for the quarter):
- Total net revenue: $244.006 million (up from $211.637 million from the same quarter of the previous year)
- Revenue increased by 15.29% over the last 12 months
- Operating expenses: $305.255 million (up from $271.198 million for the same quarter of the previous year)
- Operating expenses increased by 12.55% over the last 12 months
- Net loss: -$92.301 million (increased loss from -$87.791 million for the same quarter of the previous year)
- Diluted loss per share: -$2.22 (increased loss from -$2.07 for the same quarter of the previous year)
- Dividend declared: $1.76
- Dividend yield: 2.97%
- Diluted weighted-average shares outstanding: 40.305 million (down from 40.466 million for the same quarter of the previous year)
- Cash and cash equivalents: $108.850 million
- Cash and cash equivalents per share: $2.70
- Cash and cash equivalents makes up 1.14% of Vail Resorts' market capital
- Cash and cash equivalents makes up 2.46% of Vail Resorts' total assets
- Inventories: $17.174 billion
- Inventories makes up 10.55% of Vail Resorts' total assets
- Stockholders equity of Vail Resorts: 1.726 billion
- Stockholders equity per share: $42.83
- Vail is trading at 5.53 times its stockholders equity which is well outside the expected range of between 2 and 4 which most companies tend to trade at.
- Cash generated from operations for the full year: $323.493 million
- Cash generated from operations per share: $8.02
Vail Resorts' management commentary on the results and earnings guidance
BROOMFIELD, Colo., Sept. 26, 2019 /PRNewswire/ -- Vail Resorts, Inc. (NYSE: MTN) today reported results for the fourth quarter and fiscal year ended July 31, 2019 and provided its outlook for the fiscal year ending July 31, 2020.
Commenting on the Company's fiscal 2019 results, Rob Katz, Chief Executive Officer, said, "We are pleased with our overall results for the year, with strong growth in visitation and spending compared to the prior year, including a strong finish to the season with good conditions across our U.S. resorts throughout the year. After the challenging early season period for destination visitation, our results for the remainder of the year were largely in line with our original expectations. Our results throughout fiscal 2019 highlight the growth and stability resulting from our season pass, the benefit of our geographic diversification, the investments we make in our resorts and the success of our sophisticated, data-driven marketing efforts.
"Our Colorado, Utah and Tahoe resorts experienced strong local and destination visitation, supported by favorable conditions across the western U.S. The Company experienced relative weakness in international visitation throughout the year compared to the prior year, particularly at Whistler Blackcomb. In Australia, fiscal 2019 results were strong, supported by the addition of Falls Creek and Hotham and continued pass sales momentum.
"With a strong base of high-end consumers, we are continuing to leverage our growing network of resorts and sophisticated marketing strategies to drive guest spending across our Mountain segment. For fiscal 2019, total Mountain net revenue increased 13.5% to approximately $2.0 billion and total skier visits increased 21.5% primarily as a result of the addition of the Acquired Resorts and the favorable conditions across our U.S. resorts. Total effective ticket price ("ETP") decreased 3.4% compared to the prior year, primarily due to higher skier visitation by season pass holders, lower ETP from the Acquired Resorts and the new Military Epic Pass, partially offset by price increases in both our lift ticket and season pass products. Excluding season pass holders, ETP increased 4.9% compared to the prior year. The growth in visitation and spending compared to the prior year, along with the addition of the Acquired Resorts, drove a 17.4% increase in lift revenue, a 13.2% increase in ski school revenue, a 12.7% increase in dining revenue and an 8.0% increase in retail/rental revenue compared to the prior year."
Regarding the Company's Lodging segment, Katz said, "Fiscal 2019 Lodging results were positive with revenue (excluding payroll cost reimbursements) increasing 10.9% compared to the prior year, primarily due to the incremental operations of Triple Peaks. The average daily rate ("ADR") decreased slightly compared to the prior year primarily as a result of the inclusion of the Triple Peaks resorts, as well as incremental managed Tahoe lodging properties that we did not manage in the prior year, all of which generate a lower ADR as compared to our broader Lodging segment."
Katz continued, "Our balance sheet remains strong and the business continues to generate robust cash flow. We ended the fiscal year with $108.9 million of cash on hand and our Net Debt was 2.1 times fiscal 2019 Total Reported EBITDA. On September 23, 2019, the Company entered into the Second Amendment to the Eighth Amended and Restated Credit Agreement. The amended agreement provides for a term loan facility in an aggregate principal amount of $1.25 billion, increased from the previous term loan facility of $914.4 million as of July 31, 2019. The incremental term loan proceeds were used to fund the Peak Resorts acquisition and to prepay certain portions of the debt assumed in connection with the acquisition. I am also very pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock. The quarterly dividend will be $1.76 per share of common stock and will be payable on October 25, 2019 to shareholders of record on October 8, 2019."
Fiscal 2020 guidance
Commenting on guidance for fiscal 2020, Katz said, "Net income attributable to Vail Resorts, Inc. is expected to be between $293 million and $353 million for fiscal 2020. We estimate Resort Reported EBITDA for fiscal 2020 will be between $778 million and $818 million. Our Resort Reported EBITDA guidance includes an estimated contribution of $53 million for Peak Resorts operations, including an estimated $6 million benefit from not incurring offseason losses from August 1, 2019 through the closing date of September 24, 2019. The Company expects to incur approximately $20 million of acquisition and integration related expenses in fiscal 2020 related to the acquisitions of Peak Resorts, Falls Creek and Hotham. We expect Resort EBITDA Margin for fiscal 2020 to be approximately 31.0%, using the midpoint of the guidance range, which is an estimated 10 basis point decrease compared to fiscal 2019. We estimate Real Estate Reported EBITDA for fiscal 2020 will be between negative $2 million and positive $4 million.
"All of these estimates are predicated on the assumption of normal weather conditions throughout the ski season, a continuation of the current economic environment, an exchange rate of $0.75 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.68 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia. Fiscal 2020 guidance does not include any payroll tax impacts or income tax benefits related to the potential exercise of CEO stock appreciation awards."
Commenting on the Company's fiscal 2019 results, Rob Katz, Chief Executive Officer, said, "We are pleased with our overall results for the year, with strong growth in visitation and spending compared to the prior year, including a strong finish to the season with good conditions across our U.S. resorts throughout the year. After the challenging early season period for destination visitation, our results for the remainder of the year were largely in line with our original expectations. Our results throughout fiscal 2019 highlight the growth and stability resulting from our season pass, the benefit of our geographic diversification, the investments we make in our resorts and the success of our sophisticated, data-driven marketing efforts.
"Our Colorado, Utah and Tahoe resorts experienced strong local and destination visitation, supported by favorable conditions across the western U.S. The Company experienced relative weakness in international visitation throughout the year compared to the prior year, particularly at Whistler Blackcomb. In Australia, fiscal 2019 results were strong, supported by the addition of Falls Creek and Hotham and continued pass sales momentum.
"With a strong base of high-end consumers, we are continuing to leverage our growing network of resorts and sophisticated marketing strategies to drive guest spending across our Mountain segment. For fiscal 2019, total Mountain net revenue increased 13.5% to approximately $2.0 billion and total skier visits increased 21.5% primarily as a result of the addition of the Acquired Resorts and the favorable conditions across our U.S. resorts. Total effective ticket price ("ETP") decreased 3.4% compared to the prior year, primarily due to higher skier visitation by season pass holders, lower ETP from the Acquired Resorts and the new Military Epic Pass, partially offset by price increases in both our lift ticket and season pass products. Excluding season pass holders, ETP increased 4.9% compared to the prior year. The growth in visitation and spending compared to the prior year, along with the addition of the Acquired Resorts, drove a 17.4% increase in lift revenue, a 13.2% increase in ski school revenue, a 12.7% increase in dining revenue and an 8.0% increase in retail/rental revenue compared to the prior year."
Regarding the Company's Lodging segment, Katz said, "Fiscal 2019 Lodging results were positive with revenue (excluding payroll cost reimbursements) increasing 10.9% compared to the prior year, primarily due to the incremental operations of Triple Peaks. The average daily rate ("ADR") decreased slightly compared to the prior year primarily as a result of the inclusion of the Triple Peaks resorts, as well as incremental managed Tahoe lodging properties that we did not manage in the prior year, all of which generate a lower ADR as compared to our broader Lodging segment."
Katz continued, "Our balance sheet remains strong and the business continues to generate robust cash flow. We ended the fiscal year with $108.9 million of cash on hand and our Net Debt was 2.1 times fiscal 2019 Total Reported EBITDA. On September 23, 2019, the Company entered into the Second Amendment to the Eighth Amended and Restated Credit Agreement. The amended agreement provides for a term loan facility in an aggregate principal amount of $1.25 billion, increased from the previous term loan facility of $914.4 million as of July 31, 2019. The incremental term loan proceeds were used to fund the Peak Resorts acquisition and to prepay certain portions of the debt assumed in connection with the acquisition. I am also very pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock. The quarterly dividend will be $1.76 per share of common stock and will be payable on October 25, 2019 to shareholders of record on October 8, 2019."
Fiscal 2020 guidance
Commenting on guidance for fiscal 2020, Katz said, "Net income attributable to Vail Resorts, Inc. is expected to be between $293 million and $353 million for fiscal 2020. We estimate Resort Reported EBITDA for fiscal 2020 will be between $778 million and $818 million. Our Resort Reported EBITDA guidance includes an estimated contribution of $53 million for Peak Resorts operations, including an estimated $6 million benefit from not incurring offseason losses from August 1, 2019 through the closing date of September 24, 2019. The Company expects to incur approximately $20 million of acquisition and integration related expenses in fiscal 2020 related to the acquisitions of Peak Resorts, Falls Creek and Hotham. We expect Resort EBITDA Margin for fiscal 2020 to be approximately 31.0%, using the midpoint of the guidance range, which is an estimated 10 basis point decrease compared to fiscal 2019. We estimate Real Estate Reported EBITDA for fiscal 2020 will be between negative $2 million and positive $4 million.
"All of these estimates are predicated on the assumption of normal weather conditions throughout the ski season, a continuation of the current economic environment, an exchange rate of $0.75 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.68 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia. Fiscal 2020 guidance does not include any payroll tax impacts or income tax benefits related to the potential exercise of CEO stock appreciation awards."
Vail Resorts (NYSE: MTN) stock price history
The image below, obtained from Google, shows the stock price history of Vail Resorts (NYSE: MTN) over the last 5 years. And it's been a amazing time for Vail Resorts (NAYSE: MTN). 5 years ago the stock was trading at around $86 and its currently trading at $236.98. That's a impressive return of 175.6% over the last 5 years. The stock is trading at close to the midpoint between its 52 week high of $288.7 and its 52 week low of $179.60. To us its an indication that there is no real direction in the stock and no catalyst driving the stock price up or down.
Recent coverage of Vail Resorts
The extract below shows recent coverage of Vail Resorts as obtained from Zacks
Vail Resorts, Inc. (MTN - Free Report) reported better-than-expected results in fourth-quarter fiscal 2019. Following the results, shares of the company increased 4.2% in after-hours trading on Sep 26. So far this year, the stock has gained 9.3% compared with the industry’s 3.9% growth. In the quarter under review, the company incurred an adjusted loss of $2.22 per share, narrower than the Zacks Consensus Estimate of a loss of $2.58. In the year-ago quarter, Vail Resorts had incurred an adjusted loss of $2.07 per share.
Quarterly revenues came in at $244 million, outpacing the consensus mark of $241 million and increased 15.3% on a year-over-year basis. Total revenues were driven by growth in each segment. The company’s results also benefited from a robust performance at Whistler Blackcomb, which overshadowed slow start to the Epic Discovery season in Colorado.
Segment Results
Vail Resorts generates revenues from two segments — Resort (99.9% of net revenues in fourth-quarter fiscal 2019) and Real Estate (0.03%). Under the Resort segment, the company has Mountain and Lodging services, and other (constituting 72.1% of net revenues in the fiscal fourth quarter), and Mountain and Lodging retail and dining (27.8%). Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.
The Mountain segment reported revenues of $157.2 million in the quarter under review, up 19.7% year over year. The metric was mainly driven by higher sales from North America pass sales growth, and increased lift, ski and rental revenues. Sales were also driven by non-pass skier visitation at the company’s western U.S. resorts as well as incremental revenues from the Acquired Resorts. The segment’s EBITDA came in at negative $65.3 million compared with a negative $64.5 million in the prior-year quarter. Operating expenses at the Mountain segment totaled $222.9 million, up 13.6% year over year.
Lodging net revenues in the reported quarter were $86.7 million, up 8.1% year over year on an increase in managed condominium rooms, golf and dining sales. Under the segment, EBITDA decreased 10.6% to $5.8 million from the prior-year quarter. Operating expenses at the Lodging segment rose 9.7% year over year to $80.8 million.
Read the full article here
Vail Resorts, Inc. (MTN - Free Report) reported better-than-expected results in fourth-quarter fiscal 2019. Following the results, shares of the company increased 4.2% in after-hours trading on Sep 26. So far this year, the stock has gained 9.3% compared with the industry’s 3.9% growth. In the quarter under review, the company incurred an adjusted loss of $2.22 per share, narrower than the Zacks Consensus Estimate of a loss of $2.58. In the year-ago quarter, Vail Resorts had incurred an adjusted loss of $2.07 per share.
Quarterly revenues came in at $244 million, outpacing the consensus mark of $241 million and increased 15.3% on a year-over-year basis. Total revenues were driven by growth in each segment. The company’s results also benefited from a robust performance at Whistler Blackcomb, which overshadowed slow start to the Epic Discovery season in Colorado.
Segment Results
Vail Resorts generates revenues from two segments — Resort (99.9% of net revenues in fourth-quarter fiscal 2019) and Real Estate (0.03%). Under the Resort segment, the company has Mountain and Lodging services, and other (constituting 72.1% of net revenues in the fiscal fourth quarter), and Mountain and Lodging retail and dining (27.8%). Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.
The Mountain segment reported revenues of $157.2 million in the quarter under review, up 19.7% year over year. The metric was mainly driven by higher sales from North America pass sales growth, and increased lift, ski and rental revenues. Sales were also driven by non-pass skier visitation at the company’s western U.S. resorts as well as incremental revenues from the Acquired Resorts. The segment’s EBITDA came in at negative $65.3 million compared with a negative $64.5 million in the prior-year quarter. Operating expenses at the Mountain segment totaled $222.9 million, up 13.6% year over year.
Lodging net revenues in the reported quarter were $86.7 million, up 8.1% year over year on an increase in managed condominium rooms, golf and dining sales. Under the segment, EBITDA decreased 10.6% to $5.8 million from the prior-year quarter. Operating expenses at the Lodging segment rose 9.7% year over year to $80.8 million.
Read the full article here
Vail Resorts (NYSE:MTN) latest stock valuation
So based on the earnings report and guidance provided by Vail Resorts (ENYS: MTN) what do we value Vail Resorts (MTN) stock at? It is extremely hard to value a loss making entity but the fact that company pays a dividend and has positive cash generation a valuation on the stock of Vail Resorts can be made. Based on Vail Resorts earnings report and their earnings guidance our valuation models sets a target (full value) price of $166. We therefore believe Vail Resorts is overvalued.
We would not advise long term fundamental or value investors buy into the stock of Vail at its current price levels. Rather look to enter the stock of Vail at least 10% below our target (full value) price of $166. So a good entry point into the stock would be around $150.
We would not advise long term fundamental or value investors buy into the stock of Vail at its current price levels. Rather look to enter the stock of Vail at least 10% below our target (full value) price of $166. So a good entry point into the stock would be around $150.