Vail Resorts, Inc. (MTN): A Bull Case Theory

We came across a bullish thesis on Vail Resorts, Inc. (MTN) on Twitter by David72386784. In this article, we will summarize the bulls’ thesis on MTN. Vail Resorts, Inc. (MTN)’s share was trading at $191.85 as of Dec 4^th. MTN’s trailing and forward P/E were 31.61 and 25.32 respectively according to Yahoo Finance.

Vail Mountain Resorts (MTN) was trading at a six-year low, excluding a brief dip during the COVID-19 period, presenting a unique investment opportunity. The company’s stock has been under significant pressure, with multiple catalysts suggesting an attractive setup. First, MTN is heavily shorted and out of favor, which mirrors situations that have historically led to strong rebounds in stocks like DIS, NAPA, and PTON. Second, the company’s market position and undervaluation make it a prime target for activist investors and private equity, both of which have shown interest in the ski resort industry in the past. Third, Vail operates in an oligopoly market, where it holds irreplaceable assets and a significant competitive moat, making it highly attractive to potential acquirers.

Despite challenges in the previous year due to a poor snow season, the market is overestimating the long-term impact on MTN’s business. The current year’s snow season has strong potential, as the La Niña weather pattern is almost fully developed, setting up for an excellent season ahead. Additionally, tax-loss harvesting is affecting the stock price, creating a favorable technical setup, particularly as the January effect approaches. Private equity has shown a strong historical interest in the sector, with firms already controlling Alterra, Vail’s main competitor, and many independent resorts. This combination of undervaluation, potential for activist involvement, and a positive weather outlook for the ski season positions MTN for significant upside. In summary, the stock’s current low price, along with the possibility of external involvement and favorable market conditions, creates a compelling case for investment in Vail Mountain Resorts.

Vail Resorts, Inc. (MTN) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held MTN at the end of the third quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of MTN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MTN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.