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Marriott Vacations Worldwide Corporation (VAC)
NYSE:VAC
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Marriott Vacations Worldwide Corporation
(NYSE:VAC)
59Neutral
Positive Factors
Business Outlook
The forward-looking business is trending well, and the outlook is very compelling.
Revenue Initiatives
VAC raised their expectations for cost/revenue benefit, introducing a new incremental $75-$100 million revenue opportunity.
Valuation
The valuation of Marriott Vacations Worldwide is considered attractive as it trades below its peer group, offering a potential 62% total return.
Negative Factors
Cash Flow
Cash flow will take a significant hit, with a $100 million drag in '25 to implement and an incremental $100 million in '26.
Financial Performance
The provision remained elevated, which could negatively impact financial performance.
Guidance
The initial guidance for 2025 is below consensus expectations, which may raise concerns about the company's future performance.
Marriott Vacations Worldwide Corporation (VAC) vs. S&P 500 (SPY)
Market Cap
$2.29B
Dividend Yield4.64%
Average Volume (3M)624.30K
Price to Earnings (P/E)11.8
Beta (1Y)1.26
Revenue Growth5.08%
EPS Growth-10.62%
CountryUS
Employees22,300
SectorConsumer Cyclical
Sector Strength50
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)5.62
Shares Outstanding34,563,442
10 Day Avg. Volume504,532
30 Day Avg. Volume624,297
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.46
Price to Cash Flow (P/CF)5.80
P/FCF Ratio6.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$105.67Price Target Upside59.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Marriott Vacations Worldwide Corporation Business Overview & Revenue Model
Company DescriptionMarriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related products. It operates through two segments, Vacation Ownership and Exchange & Third-Party Management. The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Residence Club, and Marriott Vacation Club Pulse brands. It also develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand. In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through various brands, including Interval International, Trading Places International, Vacation Resorts International, and Aqua-Aston. As of December 31, 2021, the company operated approximately 120 properties in the United States and thirteen other countries and territories. The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations. Marriott Vacations Worldwide Corporation was founded in 1984 and is headquartered in Orlando, Florida.
How the Company Makes MoneyMarriott Vacations Worldwide Corporation makes money primarily through the sale of vacation ownership interests (VOIs), which are timeshare products allowing customers partial ownership of vacation accommodations. The company also generates revenue from annual maintenance fees and financing activities related to VOI purchases. Additionally, Marriott Vacations Worldwide earns income from its exchange and rental services, where it facilitates and manages vacation property exchanges and rentals. Moreover, the company benefits from resort and property management services, providing operational and management services to its resort properties. Key partnerships, such as those with Marriott International, support its brand recognition and customer acquisition strategies, enhancing its revenue generation capabilities.
Marriott Vacations Worldwide Corporation Financial Statement Overview
Summary
Marriott Vacations Worldwide Corporation exhibits strong revenue growth, yet profitability challenges persist due to fluctuating net income and EBIT/EBITDA margins. The elimination of debt improves leverage, but lack of stockholders' equity raises concerns over financial stability. Cash flow management is resilient with positive free cash flow growth, suggesting effective cash utilization.Income Statement
The company shows a steady increase in revenue from $2.89 billion in 2020 to $4.97 billion in 2024. Gross profit margin has improved significantly with a notable jump in 2024, indicating efficiency in controlling costs. However, net income has declined from a peak in 2022, suggesting challenges in maintaining profitability. EBIT and EBITDA margins have also fluctuated, with recent declines potentially impacting overall financial health.65
Positive
Balance Sheet
The debt-to-equity ratio improved in 2024 due to the elimination of total debt, but the absence of stockholders' equity presents a significant risk, as it indicates potential financial instability. The company has maintained strong cash reserves, but weak equity ratios in recent years highlight potential vulnerabilities in financial structure.50
Neutral
Cash Flow
Operating cash flow has decreased from $522 million in 2022 to $205 million in 2024, impacting the overall cash flow health. However, free cash flow remains positive and grew significantly in 2024, reflecting strong operational cash generation despite reduced operating cash flow. The free cash flow to net income ratio is robust, indicating efficient cash management despite volatility in net income.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.97B | 4.73B | 4.62B | 3.89B | 2.89B | Gross Profit |
| 1.85B | 1.82B | 1.93B | 1.45B | 729.00M | EBIT |
| -501.00M | 587.00M | 787.00M | 414.00M | 3.00M | EBITDA |
| 113.00M | 722.00M | 919.00M | 560.00M | 126.00M | Net Income Common Stockholders |
| 218.00M | 254.00M | 391.00M | 49.00M | -256.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 197.00M | 248.00M | 524.00M | 342.00M | 524.00M | Total Assets |
| 9.81B | 9.68B | 9.64B | 9.61B | 8.90B | Total Debt |
| 5.22B | 5.25B | 5.03B | 4.49B | 4.27B | Net Debt |
| 5.03B | 5.00B | 4.50B | 4.14B | 3.74B | Total Liabilities |
| 7.37B | 7.30B | 7.14B | 6.63B | 6.22B | Stockholders Equity |
| 2.44B | 2.38B | 2.50B | 2.98B | 2.65B |
| Cash Flow | Free Cash Flow | |||
| 205.00M | 114.00M | 457.00M | 296.00M | 258.00M | Operating Cash Flow |
| 205.00M | 232.00M | 522.00M | 343.00M | 299.00M | Investing Cash Flow |
| -115.00M | -112.00M | 16.00M | -213.00M | -32.00M | Financing Cash Flow |
| -132.00M | -401.00M | -486.00M | -317.00M | 23.00M |
Marriott Vacations Worldwide Corporation Technical Analysis
Negative
66.15
Price Trends
78.13
Negative
83.85
Negative
79.93
Negative
Market Momentum
-3.58
Negative
36.22
Neutral
46.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAC, the sentiment is Negative. The current price of 66.15 is below the 20-day moving average (MA) of 68.43, below the 50-day MA of 78.13, and below the 200-day MA of 79.93, indicating a bearish trend. The MACD of -3.58 indicates Negative momentum. The RSI at 36.22 is Neutral, neither overbought nor oversold. The STOCH value of 46.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VAC.
Marriott Vacations Worldwide Corporation Risk Analysis
Marriott Vacations Worldwide Corporation disclosed 41 risk factors in its most recent earnings report. Marriott Vacations Worldwide Corporation 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
Marriott Vacations Worldwide Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $54.08B | 36.76 | -41.19% | 0.27% | 9.17% | 42.78% | |
67 Neutral | $8.10B | 47.96 | -79.88% | ― | 10.30% | 23.45% | |
63 Neutral | $3.54B | 80.06 | 2.43% | ― | 25.21% | -83.25% | |
60 Neutral | $1.60B | 42.21 | 2.98% | 1.57% | 5.12% | -49.88% | |
59 Neutral | $12.26B | 11.12 | -0.55% | 3.78% | 1.42% | -20.63% | |
59 Neutral | $2.29B | 11.75 | 9.04% | 4.64% | 5.08% | -10.62% | |
58 Neutral | $1.22B | 29.30 | 2.94% | 6.23% | 3.31% | -15.16% |
* Consumer Cyclical Sector Average
Performance Comparison
VAC
Marriott Vacations Worldwide Corporation
66.15
-36.96
-35.85%
DRH
Diamondrock
7.64
-1.50
-16.41%
RLJ
RLJ Lodging
8.02
-3.20
-28.52%
HLT
Hilton Worldwide Holdings
225.71
13.56
6.39%
PLNT
Planet Fitness
96.22
32.15
50.18%
HGV
Hilton Grand Vacations
37.37
-9.38
-20.06%
Marriott Vacations Worldwide Corporation Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -21.65% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong fourth quarter performance with significant growth in contract sales and strategic expansion in various regions. The strategic business modernization initiative is expected to significantly boost adjusted EBITDA in the coming years. However, there are challenges such as a decline in the Exchange and Third-Party Management segment, expected rental profit decline, and higher G&A expenses. Despite these challenges, the company maintains a strong liquidity position and continues to see high guest satisfaction scores.Highlights
Strong Fourth Quarter Performance
Contract sales grew by 7% year-over-year with first-time buyer sales increasing by 9%. Hawaii sales grew double digits year-over-year in the quarter.
Expansion and Development
Opened new Waikiki Resort, announced plans for new Marriott Vacation Club in Thailand, additional units in Bali, first Hyatt Vacation Club in Orlando, and a new Marriott Vacation Club in Downtown Nashville.
Strategic Business Modernization Initiative
Expected to generate an additional $150 million to $200 million in annualized adjusted EBITDA by the end of 2026. Includes substantial opportunities for cost savings and accelerating revenue growth.
Increase in Guest Satisfaction Scores
Guest satisfaction scores are higher today than they were last year and in 2022.
Strong Liquidity Position
Ended the year with more than $900 million in liquidity and no corporate debt maturities until early 2026.
Lowlights
Exchange and Third-Party Management Segment Decline
Adjusted EBITDA declined by $9 million year-over-year, with half of the decline related to lower profit at Aqua Aston and the balance due to lower transactions at Interval.
Rental Profit Decline Expected
Rental profit is expected to decline around $15 million due to a higher mix of keys and lower ADR markets, higher inventory balances, and the expiration of COVID-related programs.
Higher G&A Expenses
G&A expenses expected to increase year-over-year driven by higher incentive compensation and increased technology spending.
Flat Contract Sales Expected in Q1
Contract sales in Q1 could be flattish depending on the rest of the quarter's progression.
Company Guidance
During the Marriott Vacations Worldwide Fourth Quarter 2024 earnings call, the company provided detailed guidance for 2025. They expect contract sales to increase by 2% to 6%, with tours and the Volume per Guest (VPG) both growing in the low single digits. Adjusted EBITDA is projected to be between $750 million and $780 million, including benefits of $15 million to $25 million from modernization initiatives. The company aims to generate an additional $150 million to $200 million in annualized adjusted EBITDA by the end of 2026, with half from cost savings and efficiencies and the other half from revenue growth acceleration. They also plan to spend $90 million to $95 million on reacquired inventory this year. The company highlighted their strategic initiatives to enhance operational efficiencies and accelerate growth, particularly through leveraging data and technology. They also noted a substantial pipeline of 260,000 packages, providing a strong foundation for future sales.Marriott Vacations Worldwide Corporation Corporate Events
Business Operations and StrategyFinancial Disclosures
Marriott Vacations Reports Strong Q4 2024 Financial Results
Positive
Feb 26, 2025
On February 26, 2025, Marriott Vacations Worldwide Corporation announced its financial results for the fourth quarter and full year 2024. The company reported a 7% increase in consolidated vacation ownership contract sales, reaching $477 million, with significant growth from first-time buyers. Despite a decrease in Segment Adjusted EBITDA due to lower development and financing profits, the company ended the year with strong liquidity and provided optimistic guidance for 2025. The company aims to achieve $150 million to $200 million in run-rate benefits by the end of 2026 through cost savings and revenue growth initiatives, reflecting confidence in its business model and future growth opportunities.
Executive/Board Changes
Marriott Vacations Worldwide Appoints New Independent Directors
Neutral
Feb 24, 2025
On February 24, 2025, Marriott Vacations Worldwide Corporation announced the appointment of Matthew E. Avril and James A. Dausch as independent directors of its Board, effective March 4, 2025, as part of its board refreshment process. This change follows the retirement of Melquiades R. Martinez and Raymond L. Gellein, Jr., who will step down before the company’s annual meeting in May 2025. The appointments aim to leverage Avril’s extensive experience in the hospitality and vacation ownership industries and Dausch’s expertise in digital and technology transformation, enhancing the board’s strategic capabilities.
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.