Investors in Vail Resorts, Inc. (NYSE:MTN) had a good week, as its shares rose 2.6% to close at US$242 following the release of its first-quarter results. Sales of US$268m came in 4.0% ahead of expectations, although earnings didn't fare nearly so well, recording a loss of US$2.64, a 11% miss. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on Vail Resorts after the latest results.
Taking into account the latest results, the latest consensus from Vail Resorts's eleven analysts is for revenues of US$2.58b in 2020, which would reflect a solid 11% improvement in sales compared to the last 12 months. Earnings per share are expected to rise 6.4% to US$7.99. In the lead-up to this report, analysts had been modelling revenues of US$2.56b and earnings per share (EPS) of US$7.98 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$260, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Vail Resorts analyst has a price target of US$280 per share, while the most pessimistic values it at US$235. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Vail Resorts's past performance and to peers in the same market. Next year brings more of the same, according to analysts, with revenue forecast to grow 11%, in line with its 12% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.3% per year. So it's pretty clear that Vail Resorts is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Vail Resorts's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Vail Resorts. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Vail Resorts going out to 2024, and you can see them free on our platform here..
You can also view our analysis of Vail Resorts's balance sheet, and whether we think Vail Resorts is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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