Vail Resorts Inc.
) has experienced sharp upward revisions in earnings estimates over
the past seven days, as an increase in summer guests led to solid
fiscal fourth quarter results. The resort operator hit a 52-week
high on September 25, the day of its earnings release, and then
reached a Zacks #1 Rank (Strong Buy) on September 28.
Fiscal Fourth-Quarter Beat
Vail Resorts reported a fourth quarter fiscal 2012 loss per share
of $1.50, narrower than the Zacks Consensus Estimate for a loss of
$1.56. In the year-ago quarter, the company lost $1.49.
Total net revenues increased 4.5% year over year to $113.5 million.
Net revenue for the Mountain segment jumped 11.3% to $46.4 million,
while net sales for the lodging segment inched up 0.7% to $54.8
million. However, net revenue for the real estate segment fell 1.5%
to $12.4 million.
The company's reported Resort EBITDA reflects better performance of
the Mountain and Lodging segments, which improved 1.4% year over
year, driven by enhanced summer guest visitation.
At the end of the quarter, the liquidity position remained sound
with cash in hand of $46.1 million and no borrowing under the
revolving senior credit facility. The company has virtually no
principal payments due on debt until 2019.
Pre-season sales for 2012-2013 Vail Resorts season passes appear
strong. For fiscal 2013, the company expects net income in the
range of $49.9 million to $59.9 million and Resort EBITDA between
$260 million and $270 million, reflecting an upside of 27% to 32%
year over year.
Surge in Earnings Estimates
In the past 7 days, the Zacks Consensus Estimate for fiscal 2013
climbed 23.0% to $1.50 per share on the back of upward revisions
from seven of nine estimates. The current estimate implies
year-over-year growth of 233.8%.
For fiscal 2014, the Zacks Consensus Estimate is $1.86 per share,
exhibiting an increase of 31.9% in the last 7 days aided by two
upward revisions out of five estimates. The current estimate
suggests year-over-year growth of 24.1%.
Shares of Vail Resorts currently trade at a premium on a
price-to-earnings (P/E) and price-to-sales (P/B) basis. On a
forward P/E basis, shares are trading at 38.38x, versus the peer
group average of 30.39x. On a P/B basis, shares are trading at
2.55x, versus 2.11x for the peer group average. A healthy earnings
growth prospect warrants the premium valuation of the company.
Moreover, the company's long-term estimated earnings per share
growth rate remains strong at 16.4%.
Chart Shows Strong Momentum
The stock has been trading above its 50 and 200-day moving averages
since June 4, 2012. The widening gap between the stock price line
and that of the 50 and 200-day moving average lines show the
growing momentum of Vail Resorts.
Volume is fairly strong, averaging roughly 271K daily. The
year-to-date return for the stock is 36.1% compared with the
S&P 500's return of 14.7%.
Founded in 1997 and headquartered in Broomfield, Colorado, Vail
Resorts is one of the leading mountain resort operators in North
America. The company operates in three segments - Mountain, Lodging
and Real Estate. With a market capitalization of $2.05 billion,
Vail Resorts primarily competes with HomeAway Inc. (
) and Carnival Corporation (
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