Vail Resorts Inc. Stock Upgraded (MTN)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Vail Resorts (NYSE: MTN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 13.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 30.5% when compared to the same quarter one year prior, rising from $46.39 million to $60.55 million.
  • Net operating cash flow has increased to $136.70 million or 38.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.35%.
  • Powered by its strong earnings growth of 29.92% and other important driving factors, this stock has surged by 36.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • VAIL RESORTS INC has improved earnings per share by 29.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VAIL RESORTS INC reported lower earnings of $0.40 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $0.40).
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Vail Resorts, Inc., through its subsidiaries, engages in the operation of resorts in the United States. The company operates in three segments: Mountain, Lodging, and Real Estate. The company has a P/E ratio of 79.9, above the S&P 500 P/E ratio of 17.7. Vail has a market cap of $2.03 billion and is part of the services sector and leisure industry. Shares are up 12.4% year to date as of the close of trading on Friday.

You can view the full Vail Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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