We came across a bullish thesis on Vail Resorts, Inc. (MTN) on MileHighMonk’s Substack by MileHighMonk. In this article, we will summarize the bulls’ thesis on MTN. Vail Resorts, Inc. (MTN)’s share was trading at $178.33 as of Jan 21st. MTN’s trailing and forward P/E were 29.43 and 21.93 respectively according to Yahoo Finance.
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Vail Resorts (MTN) has emerged as the leading global mountain resort operator, managing 42 iconic destinations across three continents and commanding a dominant 20% share of the North American ski market. Its transformative Epic Pass, introduced in 2008-09, revolutionized the ski industry by turning a traditionally weather-dependent business into one with predictable and recurring revenue streams. Today, 65% of Vail’s lift revenue is secured before the ski season even begins, underscoring the strength of its business model.
The company’s investment thesis is anchored in its market dominance, strategic scalability, and pricing power. Vail operates in a duopoly with Alterra Mountain Company, significantly outpacing its competitor in market share and skier visit growth, achieving a ~7% CAGR since 2016 compared to the industry’s 1.7%. By consolidating a fragmented industry, Vail has integrated premier destinations like Whistler Blackcomb and Park City into its Epic Pass network, ensuring operational efficiencies, a consistent guest experience, and enhanced pricing leverage. Between 2018 and 2024, pass revenue grew at a 15% CAGR, rising from 47% to 65% of mountain revenue, further solidifying its financial foundation.
Vail’s scale and irreplaceable assets create significant competitive advantages in an industry with high barriers to entry. The scarcity of new destination ski resorts reinforces its pricing power, while its ability to increase revenue per skier visit—reaching $145 in 2024—demonstrates its success in capturing high-margin ancillary spending. With domestic consolidation largely untapped and international expansion still in its early stages, Vail is well-positioned for sustained growth.
The company’s financial resilience is another compelling factor. Even during the COVID-19 pandemic, Vail remained cash flow positive, and its Capex+Debt/Operating Cash Flow ratio improved from ~75% in 2018 to 45% in 2024. This financial flexibility, combined with its proven ability to weather downturns, enhances its investment appeal.
While climate change poses risks, Vail’s reliance on season pass revenue mitigates volatility from poor snowfall. Furthermore, operational challenges, including a recent strike and overcrowding issues, present near-term headwinds, but do not overshadow the long-term growth potential.
For investors, Vail represents a rare opportunity to capitalize on its dominant market position, scalable business model, and predictable cash flows in an industry with significant growth potential. Despite risks, the company’s pricing power, scale, and strategic foresight make it a compelling long-term investment.
Vail Resorts, Inc. (MTN) is not on our list of the 30 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.