Bull Of The Day: Vail Resorts
Vail Resorts, Inc. (MTN - Snapshot Report) is loving El Nino this year as a big snowpack in its western resorts has resulted in a surge in lift ticket sales. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in fiscal 2016.
Vail Resorts operates 9 mountain resorts and 2 urban ski areas, with an announcement of buying a third. It operates most of the well known west coast names including Vail, Bever Creek, Breckenridge and Keystone in Colorado, Park City in Utah, Heavenly, Northstar and Kirkwood in Lake Tahoe.
Its two urban ski areas are Afton Alps in Minnesota and Mt. Brighton in Michigan. Internaionally, it operates Perisher in Australia.
It also manages small hotels under the RockResorts brand, including the Grand Teton Lodge Company in Jackson Hole, Wyoming.
Vail Buys Wilmot Mountain
On Jan 19, Vail announced its latest acquisition, and its third urban ski area, by acquiring Wilmot Mountain in Wisconsin. The purchase price was not disclosed.
Skiiers in Chicago know Wilmot, which has been in operation since 1938, as it's just 65 miles north of Chicago just across the Wisconsin border.
Wilmot was the first Midwest resort with snowmaking equipment. It has 25 trails, four terrain parks, a ski and snowboard school, a ski racing program and a tubing hill with 23 lanes.
Vail intends to redesign and update the terrain parks and instruction and expand the dining and entertainment options at the base.
Wilmot will also be a part of the Epic Pass season ski pass with the 2016-2017 ski season which allows holders to ski in all parks.
2015-2016 Ski Season Starts Off Strong
It's amazing what El Nino rains out west, resulting in a deep snow pack, and low gasoline prices will do.
On Jan 13, Vail Resorts reported its ski season metrics through Jan 10, 2016 at its U.S. mountin resorts, excluding the urban ski areas and Australia's Perisher.
Total lift ticket revenue rose 19.4% year over year. Dining revenue jumped 14.3% and ski school revenue also grew 6.7%. Customers also spent on retail/rental as revenue was up at US resort store locations by 9.1%.
Season-to-date total skier visits was up 11.1%.
Vail Resorts saw solid revenue growth at its Colorado resorts and double digit revenue growth at Park City. There was also a strong turnaround at Lake Tahoe, mostly due to the snow that finally fell this year compared to a year ago.
US customer growth continued but international visitors were down, due to the strength in the US dollar. The company expects that to continue throughout the ski season.
Fiscal 2016 Estimates Rise
The analysts are just as bullish as Vail Resorts. The fiscal 2016 Zacks Consensus Estimate has risen to $3.85 from $3.62 in the last 60 days.
That's earnings growth of 30.5%.
It will provide more information on the Wilmot acquisition on its March earnings call.
Shares Holding Up
Shares are off their highs but compared to the rest of the market, it's been holding on.
They aren't cheap. Vail Resorts trades with a forward P/E of 31.6.
If you're looking for a play on travel and low gas prices, Vail Resorts is one to keep on your short list.
Disclosure: Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the more