CNBC’s Jim Cramer on Friday offered his take on the stock of Vail Resorts, a ski resort chain whose recent earnings failed to impress Wall Street, saying he likes the company but isn’t ready to go to bat for it.
“I think Vail Resorts has potential here, even if I’m not willing to pound the table on this one,” he said. “If you want to bet on a comeback, I think you put on a small position now, in recognition of just how cheap the stock’s gotten. But I’d like to see more of a turn in the business before truly sticking my neck out for Vail.”
While Cramer praised the quality of Vail’s portfolio of resorts across the U.S., Switzerland and Australia, he noted that the company hasn’t had an easy path over the last few years. Although the stock had been a solid performer, it has “never really been able to find its footing” since its highs in 2021, he added. Vail has dealt with lower snowfall in the U.S. and decreased seasonal pass sales. Cramer also pointed out that the company had some serious operational issues earlier this year when an employee strike in Utah lead to long lines during one of the busiest times of the season.
Vail posted quarterly results on Thursday, reporting a revenue miss and an earnings beat. By Friday’s close, shares were down 2.89%. While pass sales decreased during the quarter, Cramer noted that they went on sale right after President Donald Trump’s new tariffs went into effect in April. He theorized that some skiers may have held off on buying passes while the market was in turmoil. Vail was also able to make some “modest” improvements to its financial results, Cramer said, even with fewer skiers.
Cramer also pointed out that Vail announced last week it would bring former CEO Rob Katz back to lead the company. Investors were bullish on the news, he continued, as Katz served as CEO during the entirety of Vail’s “halcyon” period.
While Cramer said the stock has piqued his interest down at these levels, he conceded that it may take a while to turn business around, and the company needs to make some changes. He wondered if they could consider cutting their prices, or at least keep them steady. He called the continued price hikes over the last few years “aggressive,” especially with the lack of unit sales growth.
“This remains a truly unique business, something that can’t be replicated, and you’re getting this opportunity to buy the stock at a fairly significant discount, as it’s currently trading at less than 20 times this year’s earnings estimates,” he said. “By historical standards, that makes it pretty darned cheap. “But, man, it sure feels like Vail needs to do something to get its mojo back.”
As spokesperson for Vail pointed CNBC towards Katz’s comments on the earnings call.
“The foundation of our success as a company remains our unique portfolio of owned and operated resorts and our strong business model that drives stability in an industry that is uniquely exposed to weather volatility,” Katz said. “Advanced commitment remains central to the guests’ experience and our own thesis on how we drive value.”
