Time To Take Positions In Vail Resorts Stock?

MTN: Vail Resorts logo
MTN
Vail Resorts

The shares of Vail Resorts (NYSE: MTN) have observed a sizable sell-off in recent months as rising inflation, countermeasures by the Fed, and the Russia-Ukraine war have lowered long-term investor sentiments. The company provides mountaineering-related services including ski school, mountain biking, hiking, and lodging in the U.S. and Canada. Per their investor presentation, the company is projecting 20% growth in lift pass revenues in FY 2022 – indicating high demand for Vail’s ski passes for the quarter ending April (Q3 FY2022). Trefis highlights the historical trends in Vail Resort’s revenues across different quarters over the last two years in an interactive dashboard analysis.

How did Vail Resorts perform in 2021?

In 2021, Vail Resorts reported $1.9 billion of total revenues – just 16% lower than pre-pandemic levels. The company’s top line observed strong growth before the pandemic, largely assisted by augmented skier visits and a series of acquisitions. Vail’s two operating segments, mountain and lodging, contribute 85% and 15% of total revenues, respectively. The mountain segment includes services such as training at ski school, lift passes, dining, and equipment rentals. The lodging segment largely includes room rentals, transportation services, and golf course fees. Assisted by strong travel demand, the company recorded 15k skier visits and $322 of room ADR (average daily rate) in 2021 – a notch higher than 2019.

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Stock is underperforming broader markets

MTN stock declined from levels of around $251 in February 2020 (pre-crisis peak) to levels of around $131 in March 2020 (as the markets bottomed out), implying MTN stock lost 48% from its approximate pre-crisis peak. It observed a strong rally post the broader market sell-off and has again declined to levels of $230 at present – almost 10% below pre-pandemic levels. In comparison, the S&P 500 Index first fell 34% as lockdowns were imposed in many countries and currently is 20% above the February 2020 level. (related: Is Wynn Stock Now Ready To Roll?)

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Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 MTN Return -8% -28% 45%
 S&P 500 Return -5% -18% 76%
 Trefis Multi-Strategy Portfolio -5% -22% 212%

[1] Month-to-date and year-to-date as of 5/19/2022
[2] Cumulative total returns since the end of 2016

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