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Why Vail Resorts (MTN) Stock Is SoaringToday

Stocks in this article: MTN

NEW YORK (TheStreet) -- Shares of Vail Resorts  (MTN) are up 6.14% to $76.29 after posting higher net income and revenue for the third quarter.

Vail Resorts reported net income of $117.9 million or $3.18 per share, up from $97.6 million or $2.66 per share in the same period last year.

Analysts polled by Thomson Reuters expected the company to earn $2.92 per share on average, for the third quarter. 

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The company also said skier visits rose 11.2% in the third quarter from a year earlier, including the addition of Canyon Resort in Utah.

Separately, TheStreet Ratings team rates VAIL RESORTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate VAIL RESORTS INC (MTN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $145.33 million or 6.31% when compared to the same quarter last year. In addition, VAIL RESORTS INC has also modestly surpassed the industry average cash flow growth rate of -3.26%.
  • VAIL RESORTS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, VAIL RESORTS INC increased its bottom line by earning $0.94 versus $0.40 in the prior year. For the next year, the market is expecting a contraction of 15.9% in earnings ($0.79 versus $0.94).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The change in net income from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from $60.55 million to $59.26 million.
  • You can view the full analysis from the report here: MTN Ratings Report
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