Vail Resorts, Inc. (NYSE:MTN) is a leading global mountain resort operator, owning and operating premier mountain resorts and urban ski areas in the United States, Canada, and Australia. Known for world-class ski destinations like Vail, Breckenridge, and Whistler Blackcomb, Vail Resorts competes with other leisure and hospitality businesses, including Hyatt Hotels Corporation and other ski resort operators.
In evaluating Vail Resorts' financial performance, the Return on Invested Capital (ROIC) is a key metric. Vail Resorts has a ROIC of 5.19%, which is slightly below its Weighted Average Cost of Capital (WACC) of 6.06%. This results in a ROIC to WACC ratio of 0.86, indicating that the company is not currently generating returns that exceed its cost of capital. This suggests that Vail Resorts may need to improve its capital efficiency to enhance shareholder value.
Comparing Vail Resorts to its peers, Masimo Corporation (MASI) has a negative ROIC of -11.49% and a WACC of 9.14%, resulting in a ROIC to WACC ratio of -1.26. This indicates that Masimo is also struggling to generate returns above its cost of capital. Similarly, Hyatt Hotels Corporation (H) has a ROIC of -20.09% and a WACC of 8.41%, with a ROIC to WACC ratio of -2.39, highlighting inefficiencies in capital utilization.
On the other hand, IDEXX Laboratories, Inc. (IDXX) and The Toro Company (TTC) demonstrate more efficient capital utilization. IDEXX has a ROIC of 38.09% and a WACC of 11.47%, resulting in a ROIC to WACC ratio of 3.32. The Toro Company has a ROIC of 13.58% and a WACC of 7.28%, with a ROIC to WACC ratio of 1.87. These figures indicate that both companies are generating returns well above their cost of capital.
Fair Isaac Corporation (FICO) stands out with a ROIC of 53.59% and a WACC of 9.36%, leading to a ROIC to WACC ratio of 5.72. This suggests that FICO is highly efficient in utilizing its capital, generating substantial returns over its cost of capital. Among the companies analyzed, FICO demonstrates the strongest ability to create value for its shareholders.
