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1. Company Snapshot

1.a. Company Description

Marriott Vacations Worldwide Corporation, a vacation company, develops, markets, sells, and manages vacation ownership and related products.It operates through two segments, Vacation Ownership and Exchange & Third-Party Management.The company manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton Vacation Club, Westin Vacation Club, Hyatt Residence Club, and Marriott Vacation Club Pulse brands.


It also develops, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and holds right to develop, market, and sell ownership residential products under The Ritz-Carlton Residences brand.In addition, the company offers exchange networks and membership programs, as well as provision of management services to other resorts and lodging properties through various brands, including Interval International, Trading Places International, Vacation Resorts International, and Aqua-Aston.As of December 31, 2021, the company operated approximately 120 properties in the United States and thirteen other countries and territories.


The company sells its upscale tier vacation ownership products primarily through a network of resort-based sales centers and off-site sales locations.Marriott Vacations Worldwide Corporation was founded in 1984 and is headquartered in Orlando, Florida.

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1.b. Last Insights on VAC

Marriott Vacations Worldwide Corporation's recent performance was negatively impacted by weaker-than-expected Q3 results, leading to a transition phase and a leadership shake-up. The company's Q3 earnings beat estimates, with adjusted diluted earnings per share of $1.69, but net loss attributable to common stockholders was $2 million. Analysts at Jefferies maintained a 'Hold' rating and cut their price target to $52 from $76. Mizuho downgraded the stock to a neutral rating. The company completed a $470 million term securitization, indicating some financial flexibility.

1.c. Company Highlights

2. Marriott Vacations Worldwide's Q3 2025 Earnings: A Mixed Bag

Marriott Vacations Worldwide reported a 4% year-over-year decline in contract sales to $434 million in Q3 2025, with a 5% lower VPG and a 1% decline in tours. Despite this, the company's EPS came in at $1.69, beating estimates of $1.64. The company's adjusted EBITDA margin was 22.1%, down from 23.4% in Q3 2024. Revenue was $643 million, down 2% year-over-year. The company's financing propensity increased 90 basis points from last year, which is good for the long-term growth given the strong margins they get from their lending business.

Publication Date: Nov -08

📋 Highlights
  • Contract Sales Decline:: 4% year-over-year drop in Q3, driven by 5% lower VPG and 1% tour decline, with Orlando and Maui down $20M collectively.
  • Cost Savings Initiative:: $20M annual savings from HR/Finance reorganization and third-party transitions, contributing to $150M–$200M EBITDA benefit by 2026.
  • New Market Expansion:: Khao Lak, Thailand resort opened, with future developments expected to add >$80M in annual contract sales over a few years.
  • Adjusted Free Cash Flow:: Guidance cut to $235M–$270M in 2025, impacted by lower EBITDA, higher unsold maintenance fees, and delayed tax refunds.
  • Commercial Rental Mitigation:: FICO scoring and Bonvoy points incentives implemented to curb third-party rentals and improve credit metrics and VPGs.

Operational Challenges

The company faced challenges in certain markets, such as Orlando, where owner arrivals were down, and VPGs were softer. The company has taken steps to address these challenges, including adjusting their sales and marketing incentive plans, curbing third-party commercial rental activity, and implementing FICO scoring data for marketing purposes. As John Geller noted, "We've adjusted our sales and marketing incentive plans to better align with our long-term objectives."

Modernization Initiatives

The company is making progress on its modernization initiatives, which are expected to generate an adjusted EBITDA benefit of $150 million to $200 million by the end of 2026. The company has reorganized a portion of its HR and Finance and Accounting functions and transitioned work to third-party providers, resulting in $20 million in annual cost savings. The company's adjusted free cash flow guidance for 2025 is $235 million to $270 million, down from previous expectations.

Valuation

Marriott Vacations Worldwide's current P/E Ratio is 9.51, and its EV/EBITDA is 7.69. The company's ROE is 7.04%, and its ROIC is 5.44%. The Dividend Yield is 6.7%, and the Free Cash Flow Yield is 6.13%. Analysts estimate next year's revenue growth at 3.2%. With the company's modernization initiatives expected to drive growth, the current valuation multiples suggest that the stock may be undervalued.

Outlook

The company's guidance for 2025 is lower due to lower adjusted EBITDA, higher 2026 unsold maintenance fees due in Q4, and the timing of tax refunds. However, the company expects to dispose of one non-core asset this year and a couple next year, which should help drive growth. With the company's initiatives to improve sales and reduce costs, Marriott Vacations Worldwide is well-positioned to return to consistent profitable growth.

3. NewsRoom

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Marriott Vacations Worldwide: The Price Drop Was Logical But Just Too Much

Nov -26

Source: seekingalpha.com

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Marriott Vacations Worldwide to Participate in Barclays Eat, Sleep, Play, Shop Conference

Nov -19

Source: businesswire.com

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Marriott Vacations Worldwide Completes $470 Million Term Securitization

Nov -18

Source: businesswire.com

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Marriott Vacations entering transition phase amid earnings miss, CEO change: analysts

Nov -12

Source: proactiveinvestors.com

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Marriott Vacations Worldwide (NYSE:VAC) Downgraded to Neutral Rating by Mizuho

Nov -12

Source: defenseworld.net

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Marriott Vacations Worldwide Announces Upcoming Retirement of Brian E. Miller

Nov -11

Source: businesswire.com

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Marriott Vacations Worldwide Announces Leadership Changes, Appoints Matthew E. Avril as Interim President and CEO

Nov -10

Source: businesswire.com

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Marriott Vacations Worldwide Corporation (VAC) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.40%)

6. Segments

Vacation Ownership

Expected Growth: 8.4%

Marriott Vacations Worldwide Corporation's 8.4% growth in Vacation Ownership is driven by increasing demand for luxury vacation experiences, expansion into new markets, and strategic partnerships. Additionally, the company's points-based system and flexible ownership options appeal to a wider demographic, contributing to the segment's growth.

Exchange & Third-Party Management

Expected Growth: 8.37%

Marriott Vacations Worldwide Corporation's 8.37% growth in Exchange & Third-Party Management is driven by increasing demand for vacation ownership and exchange services, strategic partnerships, and expansion into new markets. Additionally, the company's focus on digital transformation, customer experience, and loyalty programs has contributed to the segment's growth.

Corporate and Other

Expected Growth: 8.4%

Marriott Vacations Worldwide Corporation's Corporate and Other segment growth of 8.4% is driven by increased licensing fees from Marriott International, higher management fees from existing contracts, and cost savings initiatives. Additionally, the company's focus on digital transformation and strategic investments in new technologies have contributed to the segment's growth.

7. Detailed Products

Vacation Ownership

Marriott Vacations Worldwide Corporation offers a points-based vacation ownership program, allowing members to purchase and own a share of a resort property, providing access to a network of resorts and vacation experiences.

Exchange Programs

Marriott Vacations Worldwide Corporation offers exchange programs, enabling members to trade their points or weeks for stays at other participating resorts, hotels, and vacation experiences.

Rental Program

Marriott Vacations Worldwide Corporation offers a rental program, allowing non-members to rent villas and resort accommodations for short-term stays.

Resort Management Services

Marriott Vacations Worldwide Corporation provides resort management services, including operations, marketing, and sales support to resorts and vacation ownership properties.

Vacation Club

Marriott Vacations Worldwide Corporation offers a vacation club membership program, providing access to a network of resorts, hotels, and vacation experiences.

8. Marriott Vacations Worldwide Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Marriott Vacations Worldwide Corporation faces moderate threat from substitutes, as customers have alternative options for vacation ownership and exchange services. However, the company's strong brand reputation and loyalty programs help to mitigate this threat.

Bargaining Power Of Customers

Marriott Vacations Worldwide Corporation has a large customer base, but individual customers have limited bargaining power due to the company's diversified customer base and lack of concentration.

Bargaining Power Of Suppliers

Marriott Vacations Worldwide Corporation has a diverse supplier base, and no single supplier has significant bargaining power. The company's scale and negotiating power also help to mitigate supplier bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the vacation ownership and exchange industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The vacation ownership and exchange industry is highly competitive, with several established players competing for market share. Marriott Vacations Worldwide Corporation faces intense rivalry from companies like Wyndham Destinations and Hilton Grand Vacations.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.18%
Debt Cost 4.36%
Equity Weight 33.82%
Equity Cost 13.18%
WACC 7.35%
Leverage 195.68%

11. Quality Control: Marriott Vacations Worldwide Corporation passed 4 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

Stock-Card
Boyd Gaming

A-Score: 6.3/10

Value: 6.2

Growth: 7.3

Quality: 6.6

Yield: 1.0

Momentum: 8.5

Volatility: 8.0

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Vail Resorts

A-Score: 5.5/10

Value: 3.7

Growth: 5.9

Quality: 5.5

Yield: 8.0

Momentum: 3.0

Volatility: 7.0

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Stock-Card
Marriott Vacations Worldwide

A-Score: 5.4/10

Value: 6.7

Growth: 5.8

Quality: 5.5

Yield: 6.0

Momentum: 3.5

Volatility: 4.7

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Wynn Resorts

A-Score: 5.0/10

Value: 5.4

Growth: 5.7

Quality: 4.8

Yield: 1.0

Momentum: 7.5

Volatility: 5.7

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Stock-Card
Churchill Downs

A-Score: 4.5/10

Value: 4.3

Growth: 8.9

Quality: 5.5

Yield: 0.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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MGM Resorts

A-Score: 3.9/10

Value: 4.4

Growth: 7.7

Quality: 2.4

Yield: 0.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

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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

55.05$

Current Price

55.05$

Potential

-0.00%

Expected Cash-Flows