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Hilton Grand Vacations Inc (HGV)
NYSE:HGV

Hilton Grand Vacations (HGV) AI Stock Analysis

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Hilton Grand Vacations

(NYSE:HGV)

Rating:69Neutral
Price Target:
$42.00
▲( 10.70% Upside)
Hilton Grand Vacations demonstrates strong growth and operational efficiency, highlighted by an impressive earnings call. However, the stock's high valuation and mixed technical indicators present challenges. Financial performance is solid, but profitability metrics need improvement to enhance overall appeal.
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.
Securitization Impact
Releasing cash through improved securitization is seen as a significant catalyst for the company's shares.
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. SPDR S&P 500 ETF (SPY)

Hilton Grand Vacations Business Overview & Revenue Model

Company DescriptionHilton Grand Vacations (HGV) is a leading global timeshare company renowned for developing, marketing, and operating a portfolio of high-quality vacation ownership resorts in premier destinations. As part of the hospitality industry, HGV offers a diversified selection of vacation ownership products, including timeshare intervals and points-based vacations, that provide customers with unique and flexible vacation experiences. The company operates through a network of resorts and sales centers, primarily in North America, Europe, and Asia, and is affiliated with the Hilton Worldwide brand, ensuring a high standard of service and accommodations.
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. Overall, the company is in a strong financial position but should focus on improving profitability metrics.
Income Statement
80
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
75
Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
4.97B4.98B3.98B3.83B2.33B894.00M
Gross Profit
1.97B1.33B1.23B1.27B855.00M152.00M
EBIT
544.00M697.00M684.00M707.00M482.00M-28.00M
EBITDA
791.00M733.00M840.00M954.00M624.00M-192.00M
Net Income Common Stockholders
159.00M47.00M313.00M352.00M176.00M-201.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
259.00M328.00M589.00M223.00M432.00M428.00M
Total Assets
11.79B11.44B8.69B8.00B8.01B3.13B
Total Debt
0.007.02B4.59B3.85B4.33B1.99B
Net Debt
6.77B6.69B4.00B3.62B3.90B1.56B
Total Liabilities
10.06B9.55B6.57B5.85B6.02B2.76B
Stockholders Equity
1.58B1.75B2.12B2.15B1.99B374.00M
Cash FlowFree Cash Flow
208.00M183.00M237.00M650.00M129.00M48.00M
Operating Cash Flow
347.00M309.00M312.00M747.00M168.00M79.00M
Investing Cash Flow
-130.00M-1.57B-158.00M-97.00M-1.63B-33.00M
Financing Cash Flow
-317.00M1.16B183.00M-782.00M1.64B328.00M

Hilton Grand Vacations Technical Analysis

Technical Analysis Sentiment
Negative
Last Price37.94
Price Trends
50DMA
36.79
Positive
100DMA
38.60
Negative
200DMA
38.53
Negative
Market Momentum
MACD
0.97
Positive
RSI
47.78
Neutral
STOCH
5.55
Positive
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 37.94 is below the 20-day moving average (MA) of 38.81, above the 50-day MA of 36.79, and below the 200-day MA of 38.53, indicating a neutral trend. The MACD of 0.97 indicates Positive momentum. The RSI at 47.78 is Neutral, neither overbought nor oversold. The STOCH value of 5.55 is Positive, 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 1 New Risks
1.
Fraudulent or illegal activity related to the sale and purchase of timeshares may deter consumers from purchasing our product. Q4, 2024

Hilton Grand Vacations Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
MTMTN
73
Outperform
$5.52B21.6638.12%6.01%3.57%13.75%
72
Outperform
$1.65B26.7211.21%-9.78%7.43%
VAVAC
71
Outperform
$2.27B11.259.43%4.71%4.61%9.16%
HGHGV
69
Neutral
$3.48B116.061.90%18.40%-84.43%
MGMGM
68
Neutral
$8.53B14.0421.38%2.76%-14.31%
62
Neutral
$1.22B86.985.81%-6.41%-75.66%
62
Neutral
$6.84B11.233.09%3.95%2.66%-25.23%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HGV
Hilton Grand Vacations
37.94
-3.85
-9.21%
EVRI
Everi Holdings
14.10
7.40
110.45%
VAC
Marriott Vacations Worldwide Corporation
65.76
-23.71
-26.50%
MGM
MGM Resorts
31.35
-7.63
-19.57%
MTN
Vail Resorts
147.71
-33.48
-18.48%
PLYA
Playa Hotels & Resorts
13.45
5.02
59.55%

Hilton Grand Vacations Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 12.82%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance with significant growth in contract sales and EBITDA, robust marketing efforts, and successful integration of Bluegreen, despite challenges from macroeconomic volatility and a decline in tour flow.
Q1-2025 Updates
Positive Updates
Strong Contract Sales and EBITDA Growth
Contract sales were up 10% year-over-year to $721 million, and adjusted EBITDA was $248 million with margins excluding reimbursements of 22%.
Significant VPG Growth
VPG grew 15% to more than $4,100, with growth in both owner and new buyer channels.
Robust Marketing Package Pipeline
The marketing package pipeline remains strong at over 725,000 packages, with a 22% increase in dated packages from Q4 to Q1.
Bluegreen Integration and Synergies
Reached $89 million of cost synergies from the Bluegreen integration, with a target of $100 million by the end of 2025.
Successful Share Repurchase Program
Repurchased 5.7 million shares for $210 million year-to-date, representing 6% of shares outstanding.
Negative Updates
Impact of Macroeconomic Volatility
Increased macroeconomic volatility and unpredictability could create consumer uncertainty affecting future performance.
Tour Flow Decline
Tours were down 4% to 175,000 due to efficiency initiatives and sales center closures from past hurricanes.
Increased Cost of Product
Cost of product rose to 12% of net VOI sales, up 100 basis points year-over-year.
Company Guidance
During the Hilton Grand Vacations First Quarter 2025 Earnings Conference Call, CEO Mark Wang highlighted several key metrics and strategies that reflect the company's strong performance and future guidance. Reported contract sales increased by 10% to $721 million, while adjusted EBITDA reached $248 million with a 22% margin, excluding reimbursements. The company's VPG grew by 15% to over $4,100, driven by improvements in both owner and new buyer channels. Additionally, more than half of their EBITDA is contractually recurring, with a conversion rate of 55% to 65% into free cash flow, providing financial flexibility. The company is maintaining its EBITDA guidance for 2025, amidst a volatile macroeconomic environment, by focusing on initiatives such as enhanced lead generation, execution improvements, and product enhancements. Hilton Grand Vacations' diversified business model, robust marketing package pipeline, and strategic initiatives are designed to insulate the company against macroeconomic volatility, supporting sustained growth and value proposition.

Hilton Grand Vacations Corporate Events

Executive/Board ChangesShareholder Meetings
Hilton Grand Vacations Holds Annual Stockholders Meeting
Neutral
May 7, 2025

On May 7, 2025, Hilton Grand Vacations Inc. held its annual meeting of stockholders where several key decisions were made. Stockholders elected directors for a one-year term, ratified the appointment of Ernst & Young LLP as independent auditors for the 2025 fiscal year, and approved executive compensation in a non-binding advisory vote.

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.

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.