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Hilton Grand Vacations Inc (HGV)
NYSE:HGV
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Hilton Grand Vacations
(NYSE:HGV)
63Neutral
Positive Factors
Financial Performance
The company's consolidated revenue exceeded expectations, coming in at $1,284 million compared to the Street's $1,276.4 million.
Operational Efficiency
The sales center transition at Bluegreen is trending faster than expected, with essentially all targeted centers approved for conversion, which should drive upgrade sales in a strong price/value proposition.
Negative Factors
Cost Pressures
There are a few cost considerations in 2025, including a significant step-up in the license fee and elevated maintenance fees, which present a near-term headwind to rentals expense.
Sales Force Challenges
The last 3 quarters have been tumultuous, with the sales force stretched in many situations, driving down close rates.
Hilton Grand Vacations (HGV) vs. S&P 500 (SPY)
Market Cap
$3.47B
Dividend YieldN/A
Average Volume (3M)1.15M
Price to Earnings (P/E)81.1
Beta (1Y)1.27
Revenue Growth25.21%
EPS Growth-83.25%
CountryUS
Employees21,800
SectorConsumer Cyclical
Sector Strength55
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.47
Shares Outstanding94,655,530
10 Day Avg. Volume900,909
30 Day Avg. Volume1,151,833
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.72
Price to Cash Flow (P/CF)8.50
P/FCF Ratio18.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$48.86Price Target Upside41.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Hilton Grand Vacations Business Overview & Revenue Model
Company DescriptionHilton Grand Vacations Inc., a timeshare company, develops, markets, sells, and manages vacation ownership resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing, and Resort Operations and Club Management. It sells vacation ownership intervals and vacation ownership interests; manages resorts and clubs; operates points-based vacation clubs and resort amenities; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, and Diamond Clubs, which provide exchange, leisure travel, and reservation services to approximately 333,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs. As of December 31, 2021, it had 154 properties located in the United States. The company was founded in 1992 and is headquartered in Orlando, Florida.
How the Company Makes MoneyHilton Grand Vacations makes money through its core business model centered around vacation ownership. The company generates revenue through the sale of timeshare intervals and points-based vacation products, where customers purchase the right to use a property for a specified period each year. Additionally, HGV earns recurring revenue from annual maintenance fees, which timeshare owners pay to cover the upkeep and operation of the resorts. Another significant revenue stream for HGV is its financing solutions, where the company provides financing options for customers purchasing timeshare products, earning interest income on the loans. HGV also benefits from its affiliation with the Hilton brand, leveraging the brand's reputation and loyalty programs to attract and retain customers. Partnerships with travel agencies and marketing alliances further enhance HGV's sales and brand visibility, contributing to its overall earnings.
Hilton Grand Vacations Financial Statement Overview
Summary
Hilton Grand Vacations demonstrates strong revenue growth and efficient operational management, although it faces challenges in maintaining its net profit margin. The balance sheet is robust with no debt and a moderate equity ratio, though ROE has slightly declined. Cash flows are well-managed, showing stability and effective cash conversion.Income Statement
The company shows a strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 25.23% compared to the previous year. The gross profit margin is impressive at 58.41%, indicating efficient cost management. However, the net profit margin decreased to 4.50% from 7.87% in the prior year, suggesting some challenges in maintaining profitability. The EBIT margin stands at 12.39% while the EBITDA margin is at 14.73%, both indicating solid operational efficiency.80
Positive
Balance Sheet
Hilton Grand Vacations has a strong equity position with a debt-to-equity ratio of 0.00, reflecting zero total debt, which is excellent for financial stability. The equity ratio is at 15.31%, indicating a moderate reliance on equity financing. The return on equity has decreased to 12.79% from 14.80% the previous year, showing a decrease in efficiency in generating profits from shareholder equity.70
Positive
Cash Flow
Operating cash flow remained stable with a slight decrease compared to the previous year, but the free cash flow increased by 1.27%, indicating effective cash management. The operating cash flow to net income ratio is robust at 1.38, suggesting strong cash generation relative to net income. The free cash flow to net income ratio stands at 1.07, reflecting adequate cash coverage for net income.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.98B | 3.98B | 3.83B | 2.33B | 894.00M | Gross Profit |
| 4.98B | 1.23B | 1.27B | 855.00M | 152.00M | EBIT |
| 458.00M | 684.00M | 707.00M | 482.00M | -28.00M | EBITDA |
| 733.00M | 840.00M | 954.00M | 624.00M | -192.00M | Net Income Common Stockholders |
| 47.00M | 313.00M | 352.00M | 176.00M | -201.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 328.00M | 589.00M | 223.00M | 432.00M | 428.00M | Total Assets |
| 11.44B | 8.69B | 8.00B | 8.01B | 3.13B | Total Debt |
| 7.02B | 4.59B | 3.85B | 4.33B | 1.99B | Net Debt |
| -328.00M | 4.00B | 3.62B | 3.90B | 1.56B | Total Liabilities |
| 9.55B | 6.57B | 5.85B | 6.02B | 2.76B | Stockholders Equity |
| 1.75B | 2.12B | 2.15B | 1.99B | 374.00M |
| Cash Flow | Free Cash Flow | |||
| 309.00M | 237.00M | 650.00M | 129.00M | 48.00M | Operating Cash Flow |
| 309.00M | 312.00M | 747.00M | 168.00M | 79.00M | Investing Cash Flow |
| -1.57B | -158.00M | -97.00M | -1.63B | -33.00M | Financing Cash Flow |
| 1.16B | 183.00M | -782.00M | 1.64B | 328.00M |
Hilton Grand Vacations Technical Analysis
Negative
34.48
Price Trends
40.00
Negative
40.28
Negative
39.34
Negative
Market Momentum
-0.72
Negative
41.34
Neutral
28.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGV, the sentiment is Negative. The current price of 34.48 is below the 20-day moving average (MA) of 37.43, below the 50-day MA of 40.00, and below the 200-day MA of 39.34, indicating a neutral trend. The MACD of -0.72 indicates Negative momentum. The RSI at 41.34 is Neutral, neither overbought nor oversold. The STOCH value of 28.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HGV.
Hilton Grand Vacations Risk Analysis
Hilton Grand Vacations disclosed 71 risk factors in its most recent earnings report. Hilton Grand Vacations reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hilton Grand Vacations Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $10.10B | 14.58 | 10.53% | 6.01% | 7.02% | -4.78% | |
68 Neutral | $2.17B | 10.65 | 5.68% | 10.29% | -3.67% | 122.68% | |
65 Neutral | $2.86B | 8.01 | -46.70% | 4.81% | 3.52% | 2.49% | |
63 Neutral | $3.47B | 81.11 | 2.43% | ― | 25.21% | -83.25% | |
60 Neutral | $1.62B | 42.60 | 2.98% | 2.20% | 5.12% | -49.88% | |
59 Neutral | $2.18B | 11.18 | 9.04% | 5.47% | 5.08% | -10.62% | |
59 Neutral | $12.18B | 11.09 | -1.08% | 3.77% | 1.26% | -19.82% |
* Consumer Cyclical Sector Average
Performance Comparison
HGV
Hilton Grand Vacations
34.48
-10.73
-23.73%
DRH
Diamondrock
7.23
-1.81
-20.02%
VAC
Marriott Vacations Worldwide Corporation
56.62
-39.76
-41.25%
TNL
Travel + Leisure Co
42.84
-1.76
-3.95%
HST
Host Hotels & Resorts
13.30
-5.92
-30.80%
PK
Park Hotels & Resorts
9.72
-5.98
-38.09%
Hilton Grand Vacations Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -14.89% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements such as the successful integration of Bluegreen and the launch of HGV Max, resulting in strong membership growth and record free cash flow. However, challenges included the impact of hurricanes on sales, increased consumer finance interest expenses, and ongoing issues with tour growth and bad debt provisions.Highlights
Bluegreen Acquisition and Integration
Hilton Grand Vacations closed the Bluegreen acquisition, adding nearly 200,000 members and expanding the portfolio to more than 200 properties. They made substantial progress towards realizing $100 million in cost synergies.
HGV Max Launch and Membership Growth
Launched HGV Max to Bluegreen members, resulting in strong initial uptake with nearly 5,000 new members in less than 2 months. HGV Max member base grew 34% to more than 193,000.
Record Free Cash Flow
Generated record free cash flow of $837 million and returned a record amount to shareholders, over $432 million.
Strong VPG and Contract Sales Growth
Reported contract sales of $837 million and adjusted EBITDA of $289 million. VPG was 4,026, over 20% ahead of 2019 levels, with strong performance in both owner and new buyer channels.
APAC Region Performance
Strong performance in APAC region, particularly with high demand for remaining inventory at the Okinawa project and initial sales launch of the new Kohaku property in Waikiki.
Lowlights
Impact of Hurricanes on Sales
Core growth was impacted by back-to-back hurricanes that hit the southern U.S., resulting in nearly $23 million in lost contract sales and $11 million in EBITDA.
Challenges with Tour Growth
Tours declined roughly 1% after adjusting for onetime impacts, reflecting efforts to focus on tour efficiency rather than volume growth.
Increased Consumer Finance Interest Expense
An additional $25 million of consumer finance interest expense is expected due to the financing business optimization.
Provision for Bad Debt
The provision for bad debt was at 13.3% of owned contract sales in the quarter, with a reserve of $13 million primarily on the acquired Bluegreen portfolio.
Company Guidance
During the Hilton Grand Vacations Fourth Quarter 2024 Earnings Conference Call, the company provided comprehensive guidance for 2025, emphasizing anticipated growth in contract sales and adjusted EBITDA despite macroeconomic pressures such as inflation and elevated interest rates. The company reported contract sales of $837 million and an adjusted EBITDA of $289 million for the fourth quarter of 2024, with margins excluding reimbursements of 23%. Looking ahead, Hilton Grand Vacations expects tours to grow in the low to mid-single-digit range and VPG (Volume Per Guest) in the mid-single-digit range, with overall contract sales projected to be in the mid to high single-digit range. The company plans to increase its nonrecourse borrowing rate to between 65% and 70% in 2025 as part of its financing business optimization initiative, which is expected to improve free cash flow generation, targeting a cash conversion rate of 65% to 75%. Additionally, the company aims to return a record $600 million to shareholders through share repurchases in 2025. Hilton Grand Vacations also highlighted ongoing strategic initiatives, including the integration of its Bluegreen acquisition, which aims to realize $100 million in cost synergies, and the launch of HGV Max, which has been well-received by Bluegreen members.Hilton Grand Vacations Corporate Events
Executive/Board Changes
Hilton Grand Vacations CFO Returns from Leave
Neutral
Mar 24, 2025
On March 24, 2025, Hilton Grand Vacations Inc. announced that Daniel J. Mathewes, the company’s President and Chief Financial Officer, returned from a temporary leave of absence for personal reasons. During his absence, Erin Day, the Executive Vice President of Finance, served as the acting Chief Financial Officer and will now resume her role as Executive Vice President, Finance.
Executive/Board Changes
Hilton Grand Vacations Announces CFO Temporary Leave
Neutral
Feb 7, 2025
On February 7, 2025, Hilton Grand Vacations Inc. announced that Daniel J. Mathewes, the company’s President and Chief Financial Officer, is taking a temporary leave of absence for personal reasons. Erin Day, who has held the position of Executive Vice President of Finance since April 2024, will assume the role of acting Chief Financial Officer immediately. This leadership change is not expected to impact the company’s strategy, operations, or financial reporting.
Executive/Board Changes
Hilton Grand Vacations Announces Departure of Key Executive
Neutral
Jan 23, 2025
On January 16, 2025, Hilton Grand Vacations Inc. announced the upcoming departure of its Executive Vice President and Chief Human Resources Officer, Mr. Pablo Brizi, effective April 1, 2025. Mr. Brizi will receive compensation and benefits aligned with his severance agreement, as noted in the company’s recent reports and statements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.