MTN - Embedded Expectations Analysis - 2021 05 04
Vail Resorts, Inc. (MTN:USA) currently trades near recent highs relative to UAFRS-based (Uniform) earnings, with a 56.4x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their cost discipline, attracting new pass-holders, and the Epic Mountain Rewards programSpecifically, management may lack confidence in their ability to maintain cost discipline going forward, sustain ski season performance amidst the pandemic, and attract new pass-holders, particularly through their Epic 7-Day and Epic 4-Day promos. Moreover, management may be concerned about the impact of unutilized pass-holder credits, season pass discounts, and the potential of their Okemo uphill capacity investments. Furthermore, they may lack confidence in their ability to capitalize on pent-up travel demand following the rapid rollout of vaccinations, fully launch their Australian and North American operations on their usual opening dates, and engage with customers during the holidays. Finally, management may lack confidence in their ability to secure labor opportunities stemming from the closures of other travel and leisure businesses and mitigate the impact of capacity challenges on their ski school business
Vail Resorts is a holding company and operates through various subsidiaries. The company's business segments include: Mountain, which operates various mountain resort properties and three urban ski areas, as well as ancillary services; Lodging, which provides a range of services to guests, including owned and managed lodging properties, managed condominium units, National Park Service concessionaire properties, a resort ground transportation company, and the company-owned mountain resort golf courses; and Real Estate, which includes the sale of land parcels to third-party developers and planning for future real estate development projects, including zoning and acquisition of applicable permits.
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