To The Moon

$Vail(MTN)$ $Six Flags Entertainment Corporation(FUN)$ $INVESCO LEISURE AND ENTERTAINMENT ETF(PEJ)$ 

🎯 FY25 Results in Range, But Q4 Misses

I’m looking at Vail Resorts’ Q4 and FY25 results. Full-year Resort EBITDA hit $844.1M (guidance midpoint), net income was $280M. But Q4 disappointed: EPS -5.08 vs -4.73 expected (-7%), revenue $271.2M vs $276.2M expected (-2%). FY25 also absorbed $24.5M in one-offs tied to transformation and acquisitions.

🔴 Pass Sales Flash Red

The lead indicator: pass sales is deteriorating. Units are down ~3%, dollars up just 1%, despite a 7% price hike. That signals customer attrition, trade-down to cheaper Epic Day Passes, or difficulty attracting first-time skiers. Weak pass sales directly threaten FY26 visitation, and management confirmed skier days will decline.

📉 FY26 Guidance: Deceleration Confirmed

Guidance calls for $870M EBITDA (+3.1% YoY) and $238.5M net income (-14.8% YoY). Critically, growth is almost entirely non-organic: $38M efficiencies plus a $9M weather normalization in Australia. Strip these out and core business growth is flat to negative.

🟡 Rob Katz Returns, Admits Missteps, and Pivots Strategy

CEO Rob Katz spoke bluntly about what went wrong:

• Marketing stuck in email, slow to pivot to social and influencer channels.

• Overly transactional communication, not tapping into the emotional connection skiers have with resorts.

• Tech gaps: My Epic app lacks Apple/Google Pay, dragging mobile conversions.

The reset:

• Epic Friend Tickets to stimulate lift ticket visitation.

• Creation of a Chief Revenue Officer to rebuild top-line momentum.

• Long-term move to dynamic, granular pricing by resort and pass product (FY27+).

🟢 Cost Savings + Capital Return Provide a Buffer

• Delivered $37M in FY25 savings, guiding $75M in FY26 (ahead of the $100M two-year goal).

• $200M in buybacks at ~$156/share and a $2.22 dividend maintained, with leverage flexibility to protect payouts.

• Park City disruptions resolved, creating a FY26 operational tailwind.

📊 Technicals + Valuation

• At $145–148, Vail trades at 14.9x TEV/EBIT, well below its 10Y mean of 22.5x.

• The 4H chart shows compression inside Keltner/Bollinger bands, with resistance at $152–156 and support at $144.

• The daily chart highlights a broad down-channel from 2024; bulls need to reclaim $156–160 to flip structure, while bears control below $144.

• With valuation cheap vs history, price is coiling at a critical inflection.

🏔️ The Moat: Epic Pass, Scarcity, and Structural Strength

Few industries are as seasonal, weather-dependent, and physically constrained as skiing. Yet Vail built a global network of 42 resorts across 3 continents, including Whistler Blackcomb, Vail Mountain, and Park City. Its Epic Pass created a unified, subscription-style model that transformed how skiing is marketed, consumed, and monetized.

The moat:

• Scarcity of premium assets: the best mountains are already owned, new builds are unviable.

• Vertical integration: ski passes tied to lodging, restaurants, and schools capture full wallet share.

• Customer loyalty: millions of recurring passholders, hard for competitors to replicate.

But cracks are showing. Global skier growth has stagnated, prices are rising, and alternatives are increasingly convenient and affordable. The moat is still real, but it’s being tested.

💡 My Take

In the near term, the bear case dominates: weak pass sales, soft guidance, and declining visitation. But the longer-term bull case is about whether Katz’s reset, with dynamic pricing, digital engagement, and tech-driven guest experiences, can stabilize growth. For now, $MTN is a prove-it story, with valuation offering potential but execution risk front and center.

👉❓Does Vail’s deep moat of premium resorts and the Epic Pass subscription model still guarantee defensibility, or are we entering an era where skier stagnation and pricing fatigue erode that advantage?

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