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Hilton Grand (HGV) Soars to a 52-Week High, Time to Cash Out?

Have you been paying attention to shares of Hilton Grand Vacations Inc.HGV ? Shares have been on the move with the stock up 4.93% over the past month. HGV hit a new 52-week high of $46.62 in the previous session. Hilton Grand Vacations has gained 11.13% since the start of the year compared to the 4.02% move for the Consumer Discretionary sector and the 2.6% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 28, 2018, Hilton Grand Vacations reported EPS of $0.52 versus the Zacks Consensus Estimate of $0.51 while it missed the consensus revenue estimate by 0.79%.

For the current fiscal year, Hilton Grand Vacations is expected to post earnings of $2.83 per share on $1.89 billion in revenues. This represents a 43.65% change in EPS on a 10.35% change in revenues. For the next fiscal year, the company is expected to earn $3.07 per share on $2.03 billion in revenues. This represents changes of 8.3% and 7.45%, respectively.

Valuation Metrics

While HGV has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Hilton Grand Vacations Inc. has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 16.47x current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.67x versus its peer group's average of 18.4x. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Hilton Grand Vacations Inc. Price and Consensus

Hilton Grand Vacations Inc. Price and Consensus | Hilton Grand Vacations Inc. Quote

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Hilton Grand Vacations currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 or 2 (Buy) and Style Scores of A or B, it looks as if Hilton Grand Vacations meets the list of requirements. Thus, it seems as though HGV shares could still be poised for more gains ahead.

How Does Hilton Grand Vacations Stack Up to the Competition?

Shares of Hilton Grand Vacations have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including RICK , MCS , and CNK , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 23.77% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HGV, even beyond its own solid fundamental situation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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