Vail Resorts ($MTN) Investment Thesis
A turnaround with monopolistic assets in the making?
Vail Resorts (MTN) operates 42 mountain resorts and ski areas, primarily across North America, with a few locations in Europe and Australia. Four of its locations rank among the ten most visited in the U.S.
Ski resorts are rare, monopolistic assets, constrained by geography. You can hardly build more of them, and Vail owns more than anyone else. As the world’s largest ski resort operator, it holds a commendable position in a high-barrier industry.
Vail Resorts deserves a closer look, especially now.
What You’ll Read Today
Investment Case
History
Business Model
Industry Landscape
Moat
Key Financials
Capital Allocation & Management
Valuation
Investment Case
Vail Resorts has underperformed badly. The stock is down 16% over the past five years, while the S&P 500 has nearly doubled. This despite owning some of the most irreplaceable assets in an industry with virtually zero new supply.
Revenue and profits have slumped, and capital allocation has been poor. Management took on significant debt—not to reinvest in operations or drive growth—but to fund dividends. Moreover, a focus on markets outside of its core North American market has led to neglecting the core customer. Core stakeholders have been alienated: the skier community has grown openly hostile toward Vail, and employees have been treated poorly.
The result: a company with monopoly-like assets that has managed to squander investor goodwill, operational efficiency, and customer loyalty.
But there’s now a reason for optimism. In May, CEO Kirsten Lynch was removed after an abysmal three-year tenure. She’s been replaced by Rob Katz, the architect of Vail’s modern era, who led the company successfully from 2006 to 2021. His return marks a potential inflection point: a chance to refocus the business on operational excellence, stakeholder alignment, and long-term value creation.
That’s the opportunity on the table.
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