It has been about a month since the last earnings report for Vail Resorts (MTN). Shares have added about 5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Vail Resorts Posts Narrower-Than-Expected Loss in Q1
Vail Resorts, Inc. reported better-than-expected first-quarter fiscal 2020 results. In the quarter under review, the company incurred an adjusted loss of $2.23 per share, narrower than the Zacks Consensus Estimate of a loss of $3.00. In the year-ago quarter, Vail Resorts had incurred an adjusted loss of $2.43 per share.
Quarterly revenues came in at $267.8 million, outpacing the consensus mark of $256 million and increased 21.7% on a year-over-year basis. Total revenues were driven by growth in each segment. Also, robust performance of the company’s Australian resorts along with North American resorts' summer activities contributed to the first-quarter results.
Notably, growth in the Australia market was driven by solid Epic Australia Pass sales, good conditions and the addition of the Leichhardt chairlift at Perisher.
Vail Resorts generates revenues from two segments — Resort (98.4% of net revenues in first-quarter fiscal 2020) and Real Estate (1.6%). Under the Resort segment, the company has Mountain and Lodging services, and other (constituting 67.2% of net revenues in the fiscal first quarter), and Mountain and Lodging retail and dining (31.2%).
Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.
The Mountain segment reported revenues of $180.8 million in the quarter under review, up 24.7% year over year. The metric was mainly driven by robust performance of Falls Creek and Hotham operations.
The segment’s EBITDA loss came in at $80 million compared with a negative $83.6 million in the prior-year quarter. Operating expenses at the Mountain segment totaled $228.7 million, up 17.8% year over year.
Lodging net revenues in the reported quarter were $83.6 million, up 10.1% year over year on rise in sales from Triple Peaks and Peak Resort.
Under the segment, EBITDA decreased 16.2% to $3.3 million from the prior-year quarter. Operating expenses at the Lodging segment rose 8.2% year over year to $37.7 million.
Vail Resorts reported EBITDA loss of $76.7 million in the quarter under review compared with a negative $72.5 million a year ago.
Resort operating expenses totaled $341.5 million, up 16.2% year over year. Total segmental operating expenses increased 17.7% year over year to $346.8 million.
Cash and cash equivalents as of Oct 31, 2019, totaled $136.3 million. Net long-term debt as of Oct 31, 2019, was $2,005.1 million.
Vail Resorts approved a quarterly cash dividend of $1.76 per share of common stock, which is payable Jan 9, 2020, to its shareholders of record as of Dec 26, 2019.
Fiscal 2020 Guidance
For fiscal 2020, the company’s total EBIDTA is estimated at $776-$822 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
Currently, Vail Resorts has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
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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