NEW YORK (TheStreet) -- TheStreet's Jim Cramer is keeping an eye on Vail Resorts (MTN - Get Report) , which reports its fiscal fourth quarter earnings Monday. Analysts polled by Reuters are expecting the company to report a loss of $1.87 a share on revenue of $149.87 million for the quarter.
Cramer says it's important to watch Vail because it could be a bellwether of how the tourism industry is faring against the muscular dollar. "Right now one of the things that has really hurt the stock market is the strong dollar and a strong dollar is about reduced tourism, a strong dollar is about fewer people coming here, and yet there's a lot of people who are saying Vail Resorts is going to be good."
"if they're good," Cramer says, "take a look at Marriott (MAR - Get Report) , take a look at Starwood (HOT) which Action Alerts owns. These stocks have been in a bear market and maybe they can break out of it -- including Wyndham (WYN) -- if Vail reports a good number."
Shares of Vail are up more than 18% year-to-date.
TheStreet Quant Ratings rates Vail Resorts a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance.
We feel its strengths outweigh the fact that the company shows weak operating cash flow. The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share. 46.07% is the gross profit margin for Vail Resorts which we consider to be strong. It has increased from the same quarter the previous year.
Along with this, the net profit margin of 23.02% is above that of the industry average. 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 13.1% when compared to the same quarter one year prior, going from $117.95 million to $133.41 million. The debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.