Vail Resorts Stock Offers a Hefty Dividend and Capital Appreciation. Why It’s Time to Buy.

Skiers pass at Vail Resorts’ Whistler Blackcomb ski resort in British Columbia, Canada. (James MacDonald/Bloomberg)

The ski resort operator has a plan to regain momentum after a tough few years. How Epic Pass could help shares shine.

MTN

Vail Resorts Inc.

1-Year Price Chart

Created with Highstock 2.1.8

$158.50

as of market close July 16, 2025

Market Cap

$5.9 B

NTM P/E

20.3

Div Yield

5.9%

Beta

0.79

52 Week Range

$129.85

$199.45

U.S. ski slopes double as picturesque hiking and biking trails in the offseason. Still, investors can find a fresh pack of portfolio powder this summer in shares of Vail Resorts.

The mountain leisure and hospitality giant, with its extensive network of 42 world-class skiing destinations, is emerging from a challenging couple of years following the pandemic-era skiing boom. Its stock has lost about half its value from its late 2021 high, reflecting underwhelming results over the period and a slowdown in total skier visits.

Yet this deep correction may have made Vail Resorts undervalued. Beyond some patches of ice, its fundamentals remain well banked, with upside to sales growth and earnings—and a particularly enticing 5.6% dividend yield. A recent management change and progress toward key strategic initiatives, such as a companywide cost-savings program, could be the ticket for the stock to rally into the 2026 North America ski season and beyond.

The headlines haven’t been great for Vail. Earlier this year, a 13-day ski patrol strike halted operations at its Park City, Utah, resort, frustrating hundreds of skiers with long lines and fueling a narrative of friction in the guest experience. Staff shortages are only now clearing up, while rising wages in recent years have added to cost pressures.

Operating data for the latest ski season disappointed, as total visits at Vail’s U.S. and Canadian resorts were down approximately 3% through April 30. That trailed the broader industry, which experienced a rise in visits compared with 2024. Vail attributes some of its weakness to underwhelming snowfall in key regions and shifting “destination guest visitation patterns.” This trend might also reflect skiers trading down from Vail’s premium positioning to more budget-friendly options.

Yet despite its headwinds, Vail Resorts is delivering top-line growth and increased profitability this year. Fourth-quarter results are due in September, and management is guiding for full-year fiscal 2025 net income between $264 million and $298 million, with the midpoint up 22% from 2024, its best result in three years if it comes to fruition.

For the company’s resort segment, covering core mountain and lodging operations, midpoint guidance for fiscal 2025 earnings before interest, taxes, depreciation, and amortization, or Ebitda, is $841 million. If confirmed, it would set a new company record. While these targets were revised lower in recent quarters, it’s clear that Vail Resorts is doing something right.

Central to the company’s financial resilience is its flagship Epic Pass program, a season lift ticket that provides resort access to members. Vail has balanced softer unit sales in the past two years with steady price increases, creating a stable, recurring revenue model supported by a strong base of demand from loyal skiers; Epic Pass accounts for 64% of total resort lift revenue. And while 2025 Epic Pass unit sales of 2.3 million were down from fiscal 2024’s 2.4 million, this figure is up from 2.1 million in 2022 and nearly double the prepandemic level of 1.2 million in 2020, underscoring the program’s success.

Improvement in Vail’s financial margins, the rough edges on this ski slope, remain key for the stock to truly shine. The company’s 2025 resort margin based on Ebitda clocked in at 28.4%, below Vail’s average of 31% from 2017 through 2019 and its 2022 peak of 33.1%.

This focus on margin expansion is now a priority for Vail Resorts, a mission led by CEO Rob Katz, who has resumed his role while continuing as board chairman. Few know the business better than Katz, Vail’s CEO from 2006-21, who pioneered the Epic Pass program and led the expansion of Vail’s asset portfolio from five resorts in 2009 to its current global presence. That experience positions him to refine day-to-day operations and jump-start more robust growth. As Katz stated in a letter to employees upon his May return, “As strong a company as we are…we can still evolve and improve.”

The groundwork for Vail to lay down some fresh tracks is already set, in the company’s “resource efficiency transformation plan,” a comprehensive initiative designed to streamline global operations and unlock cost savings. This two-year program is projected to generate $100 million in annualized efficiencies by the end of fiscal 2026, with $65 million expected over the next 12 months alone, directly boosting margins and cash flow.

That is great news for investors thinking about the sustainability of Vail’s $2.22-per-share quarterly dividend, yielding 5.6%. The $332 million annualized payout is already more than covered by over $470 million in forecast free cash flow this year. Vail’s board of directors is projecting confidence in the company’s outlook by increasing the authorization for share repurchases to approximately 2.8 million shares, representing up to $462 million in potential buybacks with no expiration date. The flexibility to return capital to shareholders while reinvesting in the business points to a bright future.

Beyond its efficiency gains, Vail is strategically carving out new growth opportunities in high-margin segments. The company is actively leveraging its integrated digital ecosystem, particularly the My Epic app, to enhance the guest experience and drive revenue in areas like ski school services and gear rentals.

In terms of near-term growth, early North America Epic Pass sales trends are encouraging, with Vail citing a 2% increase in dollar terms compared with the same period last year, indicating stability ahead of the peak selling season in the fall months. Vail’s international properties in Australia and Europe are also performing well.

All this for a stock trading at an enterprise value to Ebitda ratio of 10.4 times, a significant discount to its historical average valuation multiple of closer to 17 times over the past decade. Furthermore, with a price/earnings ratio of 21, Vail Resorts also stands out as an apparent bargain next to travel-and-leisure peers such as Royal Caribbean , Wynn Resorts , and Marriott International all facing a similar macroeconomic landscape. In this case, Vail has the advantage of its dominant ski industry leadership, where its distinct portfolio of world-class mountain assets is largely unrivaled, justifying a higher earnings premium.

A handful of Wall Street analysts share a bullish conviction on Vail Resorts stock, including Ben Chaiken at Mizuho Securities, who recently rated the stock a Buy with a $216 price target, up 36% from a recent $158.50. In June, Truist Securities’ Patrick Scholes set a Street-high target price on Vail Resorts at $244, implying 54% upside from current levels. The analyst described a “favorable risk/reward setup,” while highlighting the company’s ability to benefit from the global wealth effect to support skiing demand over the long run.

Whether a rally in Vail Resorts picks up speed now or later, investors are getting paid a hefty dividend to wait, making the stock a compelling portfolio income idea—with a healthy capital-appreciation potential to boot.

Write to dan.victor@barrons.com