Investment Thesis
Vail Resorts generates strong free cash flow ($401M) with healthy operating margins (24.6%), but faces material financial headwinds with excessive leverage (5.48x debt-to-equity) and declining net income (-6.0% YoY) despite modest revenue growth. Weak liquidity (0.91x current ratio) and $3B debt burden significantly constrain operational flexibility in a cyclical leisure business.
Strengths
- Strong free cash flow generation of $401M with 15.7% FCF margin demonstrates cash conversion capability
- Healthy operating margin of 24.6% reflects efficient operations and pricing power in resort services
- Excellent ROE of 61.2% indicates efficient capital deployment and shareholder returns
Risks
- Excessive leverage with 5.48x debt-to-equity and $3.0B long-term debt against $551.7M equity severely constrains financial flexibility
- Net income declined 6.0% YoY while revenue grew only 2.7%, indicating margin compression and operational challenges
- Poor liquidity with 0.91x current ratio means current liabilities exceed current assets, creating short-term solvency risk
Key Metrics to Watch
- Net income and operating margin trends; debt-to-EBITDA ratio and deleveraging progress
- Free cash flow sustainability and allocation priority (debt reduction vs. dividends vs. buybacks)
- Current ratio and working capital trends; interest coverage ratio stability in rising rate environment
Financial Metrics
Revenue
2.6B
Net Income
337.7M
EPS (Diluted)
$9.43
Free Cash Flow
401.0M
Total Assets
5.7B
Cash
371.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
24.6%
Net Margin
13.2%
ROE
61.2%
ROA
5.9%
FCF Margin
15.7%
Balance Sheet & Liquidity
Current Ratio
0.91x
Quick Ratio
0.79x
Debt/Equity
5.48x
Debt/Assets
83.9%
Interest Coverage
4.14x
Long-term Debt
3.0B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-06-10T07:42:12.890044 |
Data as of: 2026-04-30 |
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