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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on HGV

Hilton Grand Vacations' recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.6 per share, falling short of the Zacks Consensus Estimate of $1.01 per share. The company's medical care costs and expenses seem to have taken a toll on its profitability. Additionally, some institutional investors, such as Securian Asset Management Inc. and Yousif Capital Management LLC, have reduced their stakes in the company. However, a new corporate alliance with Rasmussen University may bring benefits to eligible team members. Brokerages have given the stock a consensus rating of "Hold" (MarketBeat.com).

1.c. Company Highlights

2. Hilton Grand Vacations Posts Strong Q3 Results with 17% Contract Sales Growth

Hilton Grand Vacations reported a robust financial performance in Q3 2025, with contract sales surging 17% to $907 million, a record for the business on a pro forma basis. Adjusted EBITDA reached $302 million, with margins excluding reimbursements at 24%. However, EPS came in at $0.6, below analyst estimates of $1.01. The company's revenue grew 8% to $193 million in its Resort and Club business, driven by fee increases and stable member activity rates. The financing business also saw a rise in revenue to $128 million, with profit at $75 million and margins of 59%.

Publication Date: Nov -09

📋 Highlights
  • Contract Sales Growth:: Q3 contract sales reached $907 million, reflecting 17% YoY growth, a new record for the business on a pro forma basis.
  • Adjusted EBITDA Performance:: Adjusted EBITDA was $302 million with 24% margins, while excluding deferrals, it would have been $359 million.
  • Cash Flow Generation:: Year-to-date adjusted free cash flow totaled $342 million, with a Q3 contribution of $23 million and a full-year conversion rate of 65-70% expected.
  • New Buyer Channel Strength:: New buyer mix remained stable at 27% of contract sales, with 2% YoY growth in tours to $232,000.
  • Financing Portfolio Metrics:: Gross receivables reached $4.2 billion, with a 10.1% default rate and a 100 basis point improvement in loan loss provisions YoY (17% of owned contract sales).

Operational Highlights

The company's operational performance was strong across various metrics. Tour flow increased by 2% year-over-year to 232,000, with growth in both owner and new buyer channels. The new buyer mix remained steady at 27% of contract sales during the quarter. The company also saw a significant milestone with over 250,000 members in HGV Max, contributing to the success in driving strong contract sales.

Financing Business Performance

The financing business reported a weighted average interest rate of 14.7% and combined gross receivables of $4.2 billion, with an allowance for bad debt at 27% of the portfolio. The annualized default rate for the consolidated portfolios was 10.1% for the quarter, slightly better than the second quarter level. The company's provision was 17% of owned contract sales in the quarter, showing a 100 basis point improvement from the prior year.

Cash Flow and Capital Returns

Hilton Grand Vacations generated $23 million in adjusted free cash flow during the quarter, with inventory spending of $77 million. The company remains confident in its 65% to 70% cash flow conversion target for the year. It repurchased 3.3 million shares of common stock for $150 million during the quarter and an additional 1.1 million shares for $47 million from October 1 through October 23, demonstrating its commitment to capital returns.

Valuation Insights

With a P/E Ratio of 43.16 and an EV/EBITDA of 14.79, the market appears to be pricing in significant growth expectations for Hilton Grand Vacations. The company's ROE stands at 5.67%, and its ROIC is 5.23%. The Net Debt / EBITDA ratio is 9.98, indicating a considerable level of leverage. As the company looks to drive strong free cash flow and continue returning capital to shareholders in 2026, its current valuation metrics suggest that investors are expecting a robust performance in the coming year.

3. NewsRoom

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Hilton Grand Vacations Inc. (NYSE:HGV) Given Consensus Rating of “Hold” by Brokerages

Nov -26

Source: defenseworld.net

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Rasmussen University Announces New Corporate Alliance with Hilton Grand Vacations

Nov -17

Source: prnewswire.com

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Critical Comparison: Hilton Grand Vacations (NYSE:HGV) vs. Oriental Land (OTCMKTS:OLCLY)

Nov -05

Source: defenseworld.net

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4,944 Shares in Hilton Grand Vacations Inc. $HGV Bought by Ethic Inc.

Nov -01

Source: defenseworld.net

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Hilton Grand Vacations Inc. (HGV) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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Hilton Grand Vacations (HGV) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Oct -30

Source: zacks.com

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Hilton Grand Vacations (HGV) Q3 Earnings and Revenues Miss Estimates

Oct -30

Source: zacks.com

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Hilton Grand Vacations Reports Third Quarter 2025 Results

Oct -30

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.17%)

6. Segments

Real Estate Sales and Financing

Expected Growth: 7.4%

Growing demand for vacation ownership, increasing popularity of timeshare models, and Hilton's strong brand reputation drive growth in the real estate sales and financing services segment.

Resort Operations and Club Management

Expected Growth: 4.5%

Growing demand for luxury vacation experiences, increasing popularity of timeshare models, and Hilton Grand Vacations' strong brand reputation drive growth in the resort operations and club management segment.

Reconciling Items

Expected Growth: 4.5%

The growth of reconciling items from Hilton Grand Vacations Inc. is driven by increasing adoption of digital payment systems, rising demand for accurate financial reporting, and growing need for compliance with regulatory requirements.

Intersegment Eliminations

Expected Growth: 4.5%

The removal of intercompany transactions and balances between different business segments of Hilton Grand Vacations Inc. is expected to drive growth, driven by increasing demand for timeshare and vacation ownership, expansion into new markets, and strategic partnerships.

7. Detailed Products

Timeshare Ownership

Hilton Grand Vacations offers a points-based ownership program, allowing members to purchase a share of a vacation home and access to a network of resorts and travel opportunities.

Club Membership

Hilton Grand Vacations offers a club membership program, providing access to a network of resorts, travel discounts, and exclusive benefits.

Vacation Packages

Hilton Grand Vacations offers customized vacation packages, including accommodations, activities, and experiences at its resorts.

Resort Rentals

Hilton Grand Vacations offers rental accommodations at its resorts, available for nightly or weekly stays.

Travel Services

Hilton Grand Vacations offers travel planning services, including booking flights, car rentals, and activities.

8. Hilton Grand Vacations Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hilton Grand Vacations Inc. faces moderate threat from substitutes, as customers have various options for vacation ownership and travel accommodations.

Bargaining Power Of Customers

Hilton Grand Vacations Inc. has a large customer base, but customers have significant bargaining power due to the availability of alternative vacation options.

Bargaining Power Of Suppliers

Hilton Grand Vacations Inc. has a strong negotiating position with its suppliers, given its large scale of operations and established relationships.

Threat Of New Entrants

The threat of new entrants is low for Hilton Grand Vacations Inc., as the vacation ownership industry has significant barriers to entry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The vacation ownership industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry for Hilton Grand Vacations Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 68.20%
Debt Cost 5.56%
Equity Weight 31.80%
Equity Cost 13.69%
WACC 8.15%
Leverage 214.42%

11. Quality Control: Hilton Grand Vacations Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

42.36$

Current Price

42.36$

Potential

-0.00%

Expected Cash-Flows