Is Vail Resorts (MTN) a Massive Earnings Buy During the Holiday Season?

The popularity of snow sports like skiing and snowboarding has significantly increased in recent years. This trend is poised to continue following last year’s record-breaking snowfall and several expansions at multiple resorts this holiday season. With the advent of the winter, ski resorts across the state are churning out snow and preparing for the forthcoming 2023-24 holiday season.

Vail Resorts, Inc. (MTN), owning and operating 41 high-end resorts worldwide, has forged a robust foothold in the ski industry bolstered by its strategic locations and superior guest offerings. MTN demonstrates its substantial corporate strength with a market cap of $8.44 billion, thereby solidifying its stature within the buoyant business landscape.

The company is set to unveil the financial results for its fiscal first quarter 2024, which ended on October 31, 2023, after market close on Thursday, December 7, 2023. Analysts expect MTN’s revenue to decline 2.4% year-over-year to $272.89 million, while its EPS is projected to remain in the red at $4.63, plunging 36.2% year-over-year.

However, the fiscal 2024 forecast presented by MTN has seemingly piqued investor curiosity. The firm anticipates “meaningful growth” for the period, with a robust Resort EBITDA margin. Net income attributable to MTN is estimated to be between $316 million and $394 million, with Resort Reported EBITDA for fiscal 2024 between $912 million and $968 million.

Moving forward, several dynamic factors are poised to impact MTN’s operational performance in the foreseeable future, requiring closer attention and analysis.

MTN agreed to acquire Switzerland’s Crans-Montana Mountain Resort, marking its 42nd ski location and extending its global operations. This move is seen as the company’s latest effort to increase its international appeal by boasting various outdoor activities complemented by breathtaking alpine views. The Crans-Montana deal signifies MTN’s second Swiss ski acquisition within two years, having procured the Andermatt-Sedrun resort in 2022.

The new business deal demonstrates an 84% stake in the resort’s lift operations and 80% ownership in a key ski school associated with the site, thus portraying the company’s influential global reach and enhancing the allure of Crans-Montana Mountain Resort.

Cementing its dominance, MTN places the transaction value at CHF 118.5 million, signifying substantial potential for growth. Although immediate revenue generation from the acquisition is not expected, projections suggest that Crans-Montana will contribute approximately CHF 5 million EBITDA in its fiscal year ending July 31, 2025, marking its debut full year following the scheduled completion later in fiscal 2024.

MTN projects long-term EBITDA growth from the Alpine resort’s incorporation into MTN’s Epic Pass offerings, synergies within the company’s broader network, and investments geared toward enhancing guest experiences.

In line with its unwavering commitment to delivering superior guest experiences, the company has announced plans to roll out…

Continue reading at