Intrinsic value of Vail Resorts - MTN

Previous Close

$219.91

  Intrinsic Value

$289.76

stock screener

  Rating & Target

buy

+32%

  Value-price divergence*

-150%

Previous close

$219.91

 
Intrinsic value

$289.76

 
Up/down potential

+32%

 
Rating

buy

 
Value-price divergence*

-150%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MTN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.36
  21.00
  19.40
  17.96
  16.66
  15.50
  14.45
  13.50
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.96
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
Revenue, $m
  1,601
  1,937
  2,313
  2,728
  3,183
  3,676
  4,208
  4,776
  5,380
  6,020
  6,694
  7,402
  8,144
  8,919
  9,727
  10,570
  11,446
  12,358
  13,306
  14,291
  15,314
  16,378
  17,483
  18,633
  19,829
  21,073
  22,369
  23,719
  25,125
  26,592
  28,122
Variable operating expenses, $m
 
  1,126
  1,335
  1,566
  1,818
  2,092
  2,387
  2,702
  3,038
  3,393
  3,767
  4,110
  4,521
  4,952
  5,401
  5,868
  6,355
  6,861
  7,387
  7,934
  8,502
  9,093
  9,707
  10,345
  11,009
  11,700
  12,419
  13,169
  13,950
  14,764
  15,613
Fixed operating expenses, $m
 
  397
  407
  417
  427
  438
  449
  460
  472
  483
  495
  508
  520
  533
  547
  560
  575
  589
  604
  619
  634
  650
  666
  683
  700
  717
  735
  754
  773
  792
  812
Total operating expenses, $m
  1,318
  1,523
  1,742
  1,983
  2,245
  2,530
  2,836
  3,162
  3,510
  3,876
  4,262
  4,618
  5,041
  5,485
  5,948
  6,428
  6,930
  7,450
  7,991
  8,553
  9,136
  9,743
  10,373
  11,028
  11,709
  12,417
  13,154
  13,923
  14,723
  15,556
  16,425
Operating income, $m
  283
  414
  571
  746
  938
  1,146
  1,372
  1,613
  1,871
  2,143
  2,431
  2,784
  3,102
  3,433
  3,780
  4,141
  4,517
  4,908
  5,315
  5,738
  6,177
  6,635
  7,110
  7,605
  8,120
  8,656
  9,214
  9,796
  10,403
  11,036
  11,697
EBITDA, $m
  444
  611
  796
  1,002
  1,228
  1,474
  1,739
  2,024
  2,326
  2,647
  2,986
  3,341
  3,714
  4,105
  4,512
  4,936
  5,378
  5,838
  6,316
  6,813
  7,330
  7,867
  8,426
  9,007
  9,612
  10,241
  10,897
  11,581
  12,293
  13,037
  13,812
Interest expense (income), $m
  33
  30
  45
  61
  80
  100
  121
  144
  169
  196
  224
  253
  284
  317
  351
  386
  423
  461
  501
  543
  586
  631
  677
  726
  776
  829
  883
  940
  999
  1,061
  1,125
Earnings before tax, $m
  243
  384
  526
  685
  858
  1,047
  1,251
  1,469
  1,701
  1,948
  2,207
  2,531
  2,817
  3,117
  3,429
  3,755
  4,094
  4,446
  4,813
  5,195
  5,591
  6,004
  6,433
  6,879
  7,343
  7,827
  8,331
  8,856
  9,404
  9,975
  10,572
Tax expense, $m
  94
  104
  142
  185
  232
  283
  338
  397
  459
  526
  596
  683
  761
  842
  926
  1,014
  1,105
  1,201
  1,300
  1,403
  1,510
  1,621
  1,737
  1,857
  1,983
  2,113
  2,249
  2,391
  2,539
  2,693
  2,854
Net income, $m
  150
  280
  384
  500
  626
  764
  913
  1,072
  1,242
  1,422
  1,611
  1,848
  2,057
  2,275
  2,503
  2,741
  2,988
  3,246
  3,514
  3,792
  4,082
  4,383
  4,696
  5,022
  5,361
  5,714
  6,082
  6,465
  6,865
  7,282
  7,717

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,482
  2,922
  3,489
  4,115
  4,801
  5,545
  6,346
  7,203
  8,115
  9,079
  10,096
  11,164
  12,283
  13,452
  14,672
  15,942
  17,265
  18,640
  20,069
  21,554
  23,098
  24,702
  26,370
  28,104
  29,908
  31,785
  33,739
  35,775
  37,896
  40,108
  42,416
Adjusted assets (=assets-cash), $m
  2,414
  2,922
  3,489
  4,115
  4,801
  5,545
  6,346
  7,203
  8,115
  9,079
  10,096
  11,164
  12,283
  13,452
  14,672
  15,942
  17,265
  18,640
  20,069
  21,554
  23,098
  24,702
  26,370
  28,104
  29,908
  31,785
  33,739
  35,775
  37,896
  40,108
  42,416
Revenue / Adjusted assets
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
Average production assets, $m
  1,517
  1,836
  2,193
  2,587
  3,018
  3,485
  3,989
  4,527
  5,100
  5,707
  6,346
  7,017
  7,720
  8,455
  9,222
  10,020
  10,851
  11,715
  12,614
  13,547
  14,518
  15,526
  16,574
  17,664
  18,798
  19,977
  21,206
  22,485
  23,819
  25,209
  26,660
Working capital, $m
  -183
  -194
  -231
  -273
  -318
  -368
  -421
  -478
  -538
  -602
  -669
  -740
  -814
  -892
  -973
  -1,057
  -1,145
  -1,236
  -1,331
  -1,429
  -1,531
  -1,638
  -1,748
  -1,863
  -1,983
  -2,107
  -2,237
  -2,372
  -2,513
  -2,659
  -2,812
Total debt, $m
  700
  1,021
  1,396
  1,809
  2,262
  2,753
  3,282
  3,847
  4,449
  5,085
  5,756
  6,461
  7,200
  7,971
  8,776
  9,615
  10,488
  11,395
  12,339
  13,319
  14,338
  15,396
  16,497
  17,642
  18,832
  20,071
  21,361
  22,704
  24,105
  25,565
  27,088
Total liabilities, $m
  1,607
  1,928
  2,303
  2,716
  3,169
  3,660
  4,189
  4,754
  5,356
  5,992
  6,663
  7,368
  8,107
  8,878
  9,683
  10,522
  11,395
  12,302
  13,246
  14,226
  15,245
  16,303
  17,404
  18,549
  19,739
  20,978
  22,268
  23,611
  25,012
  26,472
  27,995
Total equity, $m
  875
  993
  1,186
  1,399
  1,632
  1,885
  2,158
  2,449
  2,759
  3,087
  3,433
  3,796
  4,176
  4,574
  4,988
  5,420
  5,870
  6,337
  6,823
  7,329
  7,853
  8,399
  8,966
  9,555
  10,169
  10,807
  11,471
  12,163
  12,885
  13,637
  14,421
Total liabilities and equity, $m
  2,482
  2,921
  3,489
  4,115
  4,801
  5,545
  6,347
  7,203
  8,115
  9,079
  10,096
  11,164
  12,283
  13,452
  14,671
  15,942
  17,265
  18,639
  20,069
  21,555
  23,098
  24,702
  26,370
  28,104
  29,908
  31,785
  33,739
  35,774
  37,897
  40,109
  42,416
Debt-to-equity ratio
  0.800
  1.030
  1.180
  1.290
  1.390
  1.460
  1.520
  1.570
  1.610
  1.650
  1.680
  1.700
  1.720
  1.740
  1.760
  1.770
  1.790
  1.800
  1.810
  1.820
  1.830
  1.830
  1.840
  1.850
  1.850
  1.860
  1.860
  1.870
  1.870
  1.870
  1.880
Adjusted equity ratio
  0.334
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  150
  280
  384
  500
  626
  764
  913
  1,072
  1,242
  1,422
  1,611
  1,848
  2,057
  2,275
  2,503
  2,741
  2,988
  3,246
  3,514
  3,792
  4,082
  4,383
  4,696
  5,022
  5,361
  5,714
  6,082
  6,465
  6,865
  7,282
  7,717
Depreciation, amort., depletion, $m
  161
  197
  225
  256
  290
  328
  367
  410
  456
  504
  555
  557
  613
  671
  732
  795
  861
  930
  1,001
  1,075
  1,152
  1,232
  1,315
  1,402
  1,492
  1,586
  1,683
  1,785
  1,890
  2,001
  2,116
Funds from operations, $m
  512
  477
  609
  756
  917
  1,092
  1,280
  1,483
  1,698
  1,925
  2,166
  2,405
  2,669
  2,946
  3,235
  3,536
  3,850
  4,176
  4,515
  4,867
  5,234
  5,615
  6,011
  6,424
  6,853
  7,299
  7,765
  8,250
  8,755
  9,283
  9,833
Change in working capital, $m
  85
  -34
  -38
  -42
  -45
  -49
  -53
  -57
  -60
  -64
  -67
  -71
  -74
  -78
  -81
  -84
  -88
  -91
  -95
  -98
  -102
  -106
  -111
  -115
  -120
  -124
  -130
  -135
  -141
  -147
  -153
Cash from operations, $m
  427
  510
  647
  797
  962
  1,141
  1,334
  1,539
  1,758
  1,989
  2,233
  2,475
  2,744
  3,024
  3,316
  3,620
  3,937
  4,267
  4,610
  4,966
  5,336
  5,721
  6,122
  6,539
  6,972
  7,424
  7,894
  8,385
  8,896
  9,429
  9,986
Maintenance CAPEX, $m
  0
  -120
  -146
  -174
  -205
  -239
  -277
  -317
  -359
  -405
  -453
  -504
  -557
  -613
  -671
  -732
  -795
  -861
  -930
  -1,001
  -1,075
  -1,152
  -1,232
  -1,315
  -1,402
  -1,492
  -1,586
  -1,683
  -1,785
  -1,890
  -2,001
New CAPEX, $m
  -109
  -319
  -356
  -394
  -431
  -468
  -504
  -539
  -573
  -606
  -639
  -671
  -703
  -735
  -767
  -799
  -831
  -864
  -898
  -934
  -970
  -1,008
  -1,048
  -1,090
  -1,134
  -1,180
  -1,228
  -1,280
  -1,333
  -1,390
  -1,450
Cash from investing activities, $m
  -124
  -439
  -502
  -568
  -636
  -707
  -781
  -856
  -932
  -1,011
  -1,092
  -1,175
  -1,260
  -1,348
  -1,438
  -1,531
  -1,626
  -1,725
  -1,828
  -1,935
  -2,045
  -2,160
  -2,280
  -2,405
  -2,536
  -2,672
  -2,814
  -2,963
  -3,118
  -3,280
  -3,451
Free cash flow, $m
  303
  71
  145
  230
  326
  434
  553
  684
  826
  978
  1,141
  1,301
  1,484
  1,676
  1,878
  2,090
  2,311
  2,541
  2,781
  3,031
  3,291
  3,561
  3,842
  4,133
  4,437
  4,752
  5,080
  5,422
  5,778
  6,149
  6,535
Issuance/(repayment) of debt, $m
  -120
  334
  374
  414
  453
  491
  529
  566
  602
  637
  671
  705
  738
  772
  805
  839
  873
  908
  943
  980
  1,019
  1,059
  1,101
  1,144
  1,190
  1,239
  1,290
  1,344
  1,400
  1,460
  1,523
Issuance/(repurchase) of shares, $m
  -54
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -167
  334
  374
  414
  453
  491
  529
  566
  602
  637
  671
  705
  738
  772
  805
  839
  873
  908
  943
  980
  1,019
  1,059
  1,101
  1,144
  1,190
  1,239
  1,290
  1,344
  1,400
  1,460
  1,523
Total cash flow (excl. dividends), $m
  136
  405
  519
  643
  779
  925
  1,082
  1,250
  1,427
  1,615
  1,812
  2,005
  2,222
  2,448
  2,683
  2,929
  3,184
  3,449
  3,725
  4,012
  4,310
  4,620
  4,942
  5,278
  5,627
  5,991
  6,370
  6,766
  7,178
  7,609
  8,058
Retained Cash Flow (-), $m
  -8
  -173
  -193
  -213
  -233
  -253
  -272
  -291
  -310
  -328
  -346
  -363
  -380
  -398
  -415
  -432
  -450
  -468
  -486
  -505
  -525
  -545
  -567
  -590
  -613
  -638
  -664
  -692
  -721
  -752
  -785
Prev. year cash balance distribution, $m
 
  55
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  287
  326
  430
  545
  672
  810
  958
  1,118
  1,287
  1,467
  1,642
  1,842
  2,050
  2,269
  2,497
  2,734
  2,981
  3,239
  3,506
  3,785
  4,074
  4,375
  4,688
  5,014
  5,353
  5,706
  6,073
  6,457
  6,856
  7,274
Discount rate, %
 
  5.20
  5.46
  5.73
  6.02
  6.32
  6.64
  6.97
  7.32
  7.68
  8.07
  8.47
  8.89
  9.34
  9.81
  10.30
  10.81
  11.35
  11.92
  12.51
  13.14
  13.80
  14.49
  15.21
  15.97
  16.77
  17.61
  18.49
  19.41
  20.38
  21.40
PV of cash for distribution, $m
 
  272
  293
  364
  432
  495
  551
  598
  635
  661
  675
  672
  662
  642
  612
  574
  529
  479
  427
  373
  320
  270
  223
  181
  143
  111
  84
  62
  45
  32
  22
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Vail Resorts, Inc., through its subsidiaries, operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates nine mountain resorts, including Vail, Beaver Creek, Breckenridge, and Keystone resorts in Colorado; Park City Mountain resort in Utah; Heavenly, Northstar, and Kirkwood in the Lake Tahoe area of California and Nevada; and Perisher in Australia, as well as three urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan. Its resorts offer various winter and summer recreational activities, including skiing, snowboarding, snowshoeing, snowtubing, sightseeing, mountain biking, guided hiking, zip lines, challenge ropes courses, alpine slides and mountain coasters, children's activities, and other recreational activities; and ski and snowboard lessons, equipment rental and retail merchandise services, dining venues, private club operations, and other winter and summer recreational activities. This segment also leases its owned and leased commercial space to third party operators; and provides real estate brokerage services. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 4,500 owned and managed hotel and condominium units. The Real Estate segment owns, develops, and sells real estate properties in and around the company’s resort communities. Vail Resorts, Inc. was founded in 1997 and is headquartered in Broomfield, Colorado.

FINANCIAL RATIOS  of  Vail Resorts (MTN)

Valuation Ratios
P/E Ratio 53
Price to Sales 5
Price to Book 9.1
Price to Tangible Book
Price to Cash Flow 18.6
Price to Free Cash Flow 25
Growth Rates
Sales Growth Rate 14.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.1%
Cap. Spend. - 3 Yr. Gr. Rate 2.8%
Financial Strength
Quick Ratio 5
Current Ratio 0.1
LT Debt to Equity 78.5%
Total Debt to Equity 80%
Interest Coverage 8
Management Effectiveness
Return On Assets 6.9%
Ret/ On Assets - 3 Yr. Avg. 5.4%
Return On Total Capital 9.2%
Ret/ On T. Cap. - 3 Yr. Avg. 6.1%
Return On Equity 17.2%
Return On Equity - 3 Yr. Avg. 11.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 28%
Gross Margin - 3 Yr. Avg. 24.4%
EBITDA Margin 27.3%
EBITDA Margin - 3 Yr. Avg. 23.7%
Operating Margin 17.7%
Oper. Margin - 3 Yr. Avg. 13.5%
Pre-Tax Margin 15.2%
Pre-Tax Margin - 3 Yr. Avg. 9.8%
Net Profit Margin 9.4%
Net Profit Margin - 3 Yr. Avg. 6.6%
Effective Tax Rate 38.7%
Eff/ Tax Rate - 3 Yr. Avg. 32.6%
Payout Ratio 69.3%

MTN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTN stock intrinsic value calculation we used $1601 million for the last fiscal year's total revenue generated by Vail Resorts. The default revenue input number comes from 2016 income statement of Vail Resorts. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MTN stock valuation model: a) initial revenue growth rate of 21% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.2%, whose default value for MTN is calculated based on our internal credit rating of Vail Resorts, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Vail Resorts.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MTN stock the variable cost ratio is equal to 58.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $387 million in the base year in the intrinsic value calculation for MTN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Vail Resorts.

Corporate tax rate of 27% is the nominal tax rate for Vail Resorts. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MTN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MTN are equal to 94.8%.

Life of production assets of 12.6 years is the average useful life of capital assets used in Vail Resorts operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MTN is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $875 million for Vail Resorts - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 39.61 million for Vail Resorts is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Vail Resorts at the current share price and the inputted number of shares is $8.7 billion.

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COMPANY NEWS

▶ KSL-Henry Crown joint venture to add big Utah ski resort to its holdings   [Aug-21-17 06:43PM  American City Business Journals]
▶ [$$] Henry Ellenbogen's Bet on the Future Pays Off Today   [Aug-19-17 12:33AM  Barrons.com]
▶ 3 Growth Stocks for the Long Term   [Aug-17-17 06:15PM  Motley Fool]
▶ ETFs with exposure to Vail Resorts, Inc. : July 28, 2017   [Jul-28-17 04:35PM  Capital Cube]
▶ ETFs with exposure to Vail Resorts, Inc. : July 18, 2017   [Jul-18-17 01:57PM  Capital Cube]
▶ Feds don't object to buyout of Colorado-based ski-resort operator   [10:06AM  American City Business Journals]
▶ ETFs with exposure to Vail Resorts, Inc. : July 7, 2017   [Jul-07-17 03:11PM  Capital Cube]
▶ ETFs with exposure to Vail Resorts, Inc. : June 26, 2017   [Jun-26-17 04:26PM  Capital Cube]
▶ Skier visits to Colorado slopes fell this season, but not as much as some had feared   [Jun-15-17 10:40PM  American City Business Journals]
▶ Company News for June 09, 2017   [Jun-09-17 10:23AM  Zacks]
▶ Vail Resorts Skids On Earnings Miss, Buys First East Coast Ski Resort   [Jun-08-17 04:07PM  Investor's Business Daily]
▶ Vail Resorts misses Street 3Q forecasts   [07:06AM  Associated Press]
▶ These Colorado companies still support Paris climate agreement despite Trump's pullout   [Jun-06-17 11:22AM  American City Business Journals]
▶ 3 Things to Watch in the Stock Market This Week   [Jun-04-17 09:21AM  Motley Fool]
▶ Ron Baron Comments on Vail Resorts   [Apr-25-17 01:21PM  GuruFocus.com]
▶ Baron Asset Fund Comments on Vail Resorts   [Apr-13-17 06:36PM  GuruFocus.com]
▶ ETFs with exposure to Vail Resorts, Inc. : April 7, 2017   [Apr-07-17 05:05PM  Capital Cube]
▶ Former P&G executive joins C-suite of upscale resorts firm   [Mar-31-17 11:20AM  at bizjournals.com]
▶ Former P&G executive joins C-suite of upscale resorts firm   [11:20AM  American City Business Journals]
▶ ETFs with exposure to Vail Resorts, Inc. : March 27, 2017   [Mar-27-17 04:00PM  Capital Cube]
▶ 3 Stocks That Tripled   [Mar-22-17 12:07PM  Motley Fool]
▶ [$$] Vail Resorts to Keep Giving the Boot to Skeptics   [Mar-21-17 05:40AM  Barrons.com]
▶ Company News for March 13, 2017   [Mar-13-17 10:10AM  Zacks]
▶ [$$] Charting the Market   [Mar-11-17 12:35AM  at Barrons.com]
▶ 3 Things to Watch in the Stock Market This Week   [Mar-05-17 01:32PM  at Motley Fool]
▶ Better Buy: Wynn Resorts Ltd. vs. Vail Resorts   [Feb-27-17 09:12AM  at Motley Fool]
▶ [$$] Vail Resorts to Buy Stowe Mountain Resort Operations From AIG   [Feb-22-17 12:07AM  at The Wall Street Journal]
▶ [$$] Vail Resorts to Buy Stowe Mountain Resort Operations   [02:09PM  at The Wall Street Journal]
Stock chart of MTN Financial statements of MTN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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