How HGV’s Flat Revenue and Earnings Miss May Reshape Hilton Grand Vacations’ Growth Narrative

• Earlier this month, Hilton Grand Vacations reported revenues of about US$1.30 billion, essentially flat year on year and around 5% below analyst expectations, alongside a significant shortfall in adjusted operating income estimates.
• The company also delivered the weakest performance versus analyst forecasts among its travel and vacation provider peers, raising fresh questions about its ability to meet the ambitious growth and margin gains embedded in consensus views.
• We’ll now explore how this flat revenue performance and earnings miss may alter Hilton Grand Vacations’ previously optimistic investment narrative.

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Hilton Grand Vacations Investment Narrative Recap

To be a shareholder in Hilton Grand Vacations, you have to believe the vacation ownership model can still compound value through owner growth, upgrades and successful integration of acquisitions like Diamond and Bluegreen. The latest quarter’s flat US$1.30 billion in revenue and earnings shortfall matters because it directly challenges the near term catalyst of margin expansion, while also amplifying the key risk that weaker demand and higher bad debt could keep profitability under pressure.

Against that backdrop, the company’s aggressive share buybacks stand out, with about US$500 million used to repurchase roughly 13% of shares under the August 2024 plan, followed by a new US$600 million authorization. While this capital return supports per share metrics, it sits uncomfortably alongside recent earnings misses and already tight interest coverage, which could constrain flexibility if integration benefits or owner growth take longer to show up.

Yet while buybacks can support the share price in the short term, investors should also be aware that rising bad debt and default rates could...

Read the full narrative on Hilton Grand Vacations (it's free!)

Hilton Grand Vacations’ narrative projects $6.4 billion revenue and $785.5 million earnings by 2028. This requires 12.6% yearly revenue growth and about a $728.5 million earnings increase from $57.0 million today.

Uncover how Hilton Grand Vacations' forecasts yield a $51.70 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community span from US$51.70 to US$54,269.95, showing just how far apart individual views can be. Set against HGV’s recent revenue miss and pressure on margins, this wide spread underlines why you may want to compare several perspectives before forming your own view.

Explore 4 other fair value estimates on Hilton Grand Vacations - why the stock might be worth just $51.70!

Build Your Own Hilton Grand Vacations Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hilton Grand Vacations research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Hilton Grand Vacations research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hilton Grand Vacations' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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