Investment Thesis
Marriott Vacations is operationally insolvent with a $299M operating loss despite $1.3B in revenue, indicating fundamental business deterioration rather than cyclical weakness. Negative operating cash flow (-$4M) and free cash flow (-$12M) combined with 1.55x leverage and negative interest coverage reveal the company cannot service its $3.1B debt from operations and must rely on asset liquidation or refinancing to survive.
Strengths
- Revenue growth of 7.7% YoY shows top-line resilience in core vacation ownership business
- Maintains $268M in cash reserves providing near-term liquidity runway
- 32 insider Form 4 filings suggest management engagement despite operational challenges
Risks
- Operating margin of -23.8% with $299M operating loss indicates core business is deeply unprofitable
- Negative operating cash flow (-$4M) and free cash flow (-$12M) with deteriorating EPS (-257.6% YoY) signal structural business model failure
- Debt/Equity of 1.55x with negative interest coverage ratio (-1288.8x) means company cannot service debt from operations; refinancing risk is acute
- Return metrics collapsed (ROE 1.1%, ROA 0.2%) indicating severe capital inefficiency and potential covenant violation risk
Key Metrics to Watch
- Operating cash flow trend and path to positive FCF generation
- Operating margin recovery and when/if company returns to operating profitability
- Debt refinancing activity and covenant compliance status on $3.1B long-term debt
- Cash burn rate and runway before liquidity crisis at current negative OCF
Financial Metrics
Revenue
1.3B
Net Income
22.0M
EPS (Diluted)
$0.64
Free Cash Flow
-12.0M
Total Assets
9.6B
Cash
268.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-23.8%
Net Margin
1.8%
ROE
1.1%
ROA
0.2%
FCF Margin
-1.0%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
1.55x
Debt/Assets
79.3%
Interest Coverage
-1,288.79x
Long-term Debt
3.1B
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: 2026-05-07T10:55:55.498170 |
Data as of: 2026-03-31 |
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