Hilton Grand Vacations (HGV) AI Stock Analysis

• Market Cap: $3.58B
• Dividend Yield: N/A
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 81.1
• Beta (1Y): 1.28
• Revenue Growth: 25.21%
• EPS Growth: -83.25%
• Country: US
• Employees: 15,000
• Sector: Consumer Cyclical
• Sector Strength: 51
• Industry: Hotels, Lodging & Leisure
• EPS (TTM): 0.47
• Shares Outstanding: 94,655,530
• 10 Day Avg. Volume: 1,117,064
• 30 Day Avg. Volume: 1,129,403
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.72
• Price to Cash Flow (P/CF): 8.50
• P/FCF Ratio: 18.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $48.67
• Price Target Upside: 28.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Hilton Grand Vacations shows solid financial performance with strong revenue growth and efficient cash management, but faces challenges in profitability and valuation. The technical analysis indicates a bearish trend, and the high P/E ratio suggests overvaluation. Despite positive earnings call insights on strategic growth and shareholder value initiatives, external challenges such as weather impacts and increased financing costs present risks.

Positive Factors

Financial Performance

The company's consolidated revenue exceeded expectations, coming in at $1,284 million compared to the Street's $1,276.4 million.

Operational Efficiency

HGV reported Economic EBITDA better than expected, driven by improved VPG and sales and marketing efficiency.

Strategic Partnerships

The Bluegreen deal continues to exceed expectations, with cost synergies already reaching a $72mm annualized run-rate toward the $100mm target within 24 months.

Negative Factors

Cost Pressures

There are a few cost considerations in 2025, including a significant step-up in the license fee and elevated maintenance fees, which present a near-term headwind to rentals expense.

Earnings Expectations

HGV reported 3Q24 adj. EBITDA of $276mm, below both the Citizens JMP estimate and the consensus expectations of $322mm and $284mm, respectively.

Sales Force Challenges

The last 3 quarters have been tumultuous, with the sales force stretched in many situations, affecting efficiency and closing rates.

Hilton Grand Vacations Business Overview & Revenue Model

Company Description

Hilton Grand Vacations Inc., a timeshare company, develops, markets, sells, and manages vacation ownership resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing, and Resort Operations and Club Management. It sells vacation ownership intervals and vacation ownership interests; manages resorts and clubs; operates points-based vacation clubs and resort amenities; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, and Diamond Clubs, which provide exchange, leisure travel, and reservation services to approximately 333,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs. As of December 31, 2021, it had 154 properties located in the United States. The company was founded in 1992 and is headquartered in Orlando, Florida.

How the Company Makes Money

Hilton Grand Vacations makes money through its core business model centered around vacation ownership. The company generates revenue through the sale of timeshare intervals and points-based vacation products, where customers purchase the right to use a property for a specified period each year. Additionally, HGV earns recurring revenue from annual maintenance fees, which timeshare owners pay to cover the upkeep and operation of the resorts. Another significant revenue stream for HGV is its financing solutions, where the company provides financing options for customers purchasing timeshare products, earning interest income on the loans. HGV also benefits from its affiliation with the Hilton brand, leveraging the brand's reputation and loyalty programs to attract and retain customers. Partnerships with travel agencies and marketing alliances further enhance HGV's sales and brand visibility, contributing to its overall earnings.

Hilton Grand Vacations Financial Statement Overview

Summary

Hilton Grand Vacations demonstrates strong revenue growth and efficient operational management, although it faces challenges in maintaining its net profit margin. The balance sheet is robust with no debt and a moderate equity ratio, though ROE has slightly declined. Cash flows are well-managed, showing stability and effective cash conversion.

Income Statement

The company shows a strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 25.23% compared to the previous year. The gross profit margin is impressive at 58.41%, indicating efficient cost management. However, the net profit margin decreased to 4.50% from 7.87% in the prior year, suggesting some challenges in maintaining profitability. The EBIT margin stands at 12.39% while the EBITDA margin is at 14.73%, both indicating solid operational efficiency.

Balance Sheet

Hilton Grand Vacations has a strong equity position with a debt-to-equity ratio of 0.00, reflecting zero total debt, which is excellent for financial stability. The equity ratio is at 15.31%, indicating a moderate reliance on equity financing. The return on equity has decreased to 12.79% from 14.80% the previous year, showing a decrease in efficiency in generating profits from shareholder equity.

Cash Flow

Operating cash flow remained stable with a slight decrease compared to the previous year, but the free cash flow increased by 1.27%, indicating effective cash management. The operating cash flow to net income ratio is robust at 1.38, suggesting strong cash generation relative to net income. The free cash flow to net income ratio stands at 1.07, reflecting adequate cash coverage for net income.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.49B	4.98B	3.98B	3.83B	2.33B	894.00M
	Gross Profit
1.26B	4.98B	1.23B	1.27B	855.00M	152.00M
	EBIT
658.00M	458.00M	684.00M	707.00M	482.00M	-28.00M
	EBITDA
935.00M	733.00M	840.00M	954.00M	624.00M	-192.00M
	Net Income Common Stockholders
298.00M	47.00M	313.00M	352.00M	176.00M	-201.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
328.00M	328.00M	589.00M	223.00M	432.00M	428.00M
	Total Assets
11.44B	11.44B	8.69B	8.00B	8.01B	3.13B
	Total Debt
7.02B	7.02B	4.59B	3.85B	4.33B	1.99B
	Net Debt
-328.00M	-328.00M	4.00B	3.62B	3.90B	1.56B
	Total Liabilities
9.55B	9.55B	6.57B	5.85B	6.02B	2.76B
	Stockholders Equity
1.75B	1.75B	2.12B	2.15B	1.99B	374.00M
Cash Flow		Free Cash Flow
545.00M	309.00M	237.00M	650.00M	129.00M	48.00M
	Operating Cash Flow
606.00M	309.00M	312.00M	747.00M	168.00M	79.00M
	Investing Cash Flow
-1.65B	-1.57B	-158.00M	-97.00M	-1.63B	-33.00M
	Financing Cash Flow
-57.00M	1.16B	183.00M	-782.00M	1.64B	328.00M

Hilton Grand Vacations Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 37.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGV, the sentiment is Negative. The current price of 37.87 is below the 20-day moving average (MA) of 38.37, below the 50-day MA of 40.23, and below the 200-day MA of 39.40, indicating a bearish trend. The MACD of -0.69 indicates Negative momentum. The RSI at 45.97 is Neutral, neither overbought nor oversold. The STOCH value of 73.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HGV.

Hilton Grand Vacations Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HST	74 Outperform	$10.16B	14.96	10.53%	5.40%	7.02%	-4.78%
PK	68 Neutral	$2.25B	11.16	5.68%	8.87%	-3.67%	122.68%
TNL	65 Neutral	$3.19B	9.06	-46.70%	4.17%	3.52%	2.49%
HGV	63 Neutral	$3.58B	81.13	2.43%	―	25.21%	-83.25%
DRH	60 Neutral	$1.63B	43.65	2.98%	1.52%	5.12%	-49.88%
Sector *	59 Neutral	$12.60B	11.17	0.97%	3.72%	1.34%	-21.34%
VAC	59 Neutral	$2.33B	11.76	9.04%	4.64%	5.08%	-10.62%

Hilton Grand Vacations Corporate Events

Hilton Grand Vacations CFO Returns from Leave

On March 24, 2025, Hilton Grand Vacations Inc. announced that Daniel J. Mathewes, the company’s President and Chief Financial Officer, returned from a temporary leave of absence for personal reasons. During his absence, Erin Day, the Executive Vice President of Finance, served as the acting Chief Financial Officer and will now resume her role as Executive Vice President, Finance.

Hilton Grand Vacations Announces CFO Temporary Leave

On February 7, 2025, Hilton Grand Vacations Inc. announced that Daniel J. Mathewes, the company’s President and Chief Financial Officer, is taking a temporary leave of absence for personal reasons. Erin Day, who has held the position of Executive Vice President of Finance since April 2024, will assume the role of acting Chief Financial Officer immediately. This leadership change is not expected to impact the company’s strategy, operations, or financial reporting.

Hilton Grand Vacations Announces Departure of Key Executive

On January 16, 2025, Hilton Grand Vacations Inc. announced the upcoming departure of its Executive Vice President and Chief Human Resources Officer, Mr. Pablo Brizi, effective April 1, 2025. Mr. Brizi will receive compensation and benefits aligned with his severance agreement, as noted in the company’s recent reports and statements.