This company, which primarily owns and operates ski resorts earning revenue from lift tickets, food& beverage, lodging, and rentals, has been grouped into ski resort sector in sport centers industry.
It seems that the demand for ski resort in US market has been stabilized and picking up since 2016 as indicated by increased visits and revenue of those companies in this sector and their ability to raise price of lift. However, we think we still need further data to confirm that the growth in visits and revenue has come from general increase in demand.
It seems that the growth in revenue in some typical companies in this sector may have been driven by longer season in the past two years. We have seen the shrinking gross margins and EBI/sales ratio from those companies and thus profit. The typical gross margin is about 12% in 2018, SG&A is about 4%, operating margin is about 8%, and EBI/sales is about 4% in 2018.
The typical enterprise price/EBI (adjusted with tax field) ratio is 55.
It seems that the demand for ski resorts and related service of this company has turned into positive and fast growth since 2016 as indicated by the growth in its resort visits in 2016 and 2017. However, the growth seems to be having a pause in the past nine months.
The first nine months of fiscal 2018 compared with the same period of 2017 (ended Jan 31 2018)
Net revenue increased about 5% due to increase of about 3% in lift ticket, increase of 4.6% in food& beverage, and increase of 28% in equips rental, which have been driven partially by longer ski season.
Fiscal 2017 compared with fiscal 2016
Net revenue increased about 29% due to increase of about 28% in lift ticket, increase of 46% in food& beverage, and increase of 22% in equips rental, which have been driven by increased visits probably as a result of longer season.
Fiscal 2016 compared with fiscal 2015
Net revenue decreased about 9% due to decrease of about 10% in lift ticket, decrease of 16% in food& beverage, and decrease of 12% in equips rental, which have been attributable to decrease in visits.
Its gross margin (including direct operating costs and depreciation) was down from about 18% to about 12% primarily due to faster increased costs (including labor costs) as a result of longer season driving revenue. With the flat SG&A as percentage of sales (4%), we have been decreased operating margin (8% currently).
Stock performance
This company is having an enterprise price/EBI ratio of 55. We think that its stock was overvalued COMPARED WITH SIMILAR transaction of COMPANY-Intrawest Resorts Holdings, Inc, which has enterprise price/EBI ratio of about 31.
