Vail Resorts, Inc. (NYSE:MTN) just released its latest second-quarter report and things are not looking great. Results look to have been somewhat negative - revenue fell 6.5% short of analyst estimates at US$1.1b, and statutory earnings of US$5.76 per share missed forecasts by 3.8%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the nine analysts covering Vail Resorts are now predicting revenues of US$2.93b in 2024. If met, this would reflect a satisfactory 3.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 23% to US$7.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.05b and earnings per share (EPS) of US$8.98 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.8% to US$243. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Vail Resorts analyst has a price target of US$272 per share, while the most pessimistic values it at US$201. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.4% growth on an annualised basis. That is in line with its 7.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.6% per year. So although Vail Resorts is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Vail Resorts. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Vail Resorts analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Vail Resorts that you need to take into consideration.
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