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1. Company Snapshot

1.a. Company Description

Hilton Grand Vacations Inc., a timeshare company, develops, markets, sells, and manages vacation ownership resorts primarily under the Hilton Grand Vacations brand.The company operates in two segments, Real Estate Sales and Financing, and Resort Operations and Club Management.It sells vacation ownership intervals and vacation ownership interests; manages resorts and clubs; operates points-based vacation clubs and resort amenities; and finances and services loans provided to consumers for their timeshare purchases.


The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, and Diamond Clubs, which provide exchange, leisure travel, and reservation services to approximately 333,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs.As of December 31, 2021, it had 154 properties located in the United States.The company was founded in 1992 and is headquartered in Orlando, Florida.

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1.b. Last Insights on HGV

Hilton Grand Vacations' recent performance was negatively impacted by its Q3 earnings miss, with quarterly earnings of $0.6 per share, falling short of the Zacks Consensus Estimate of $1.01 per share. The company's medical care costs and expenses seem to have taken a toll on its profitability. Additionally, some institutional investors, such as Securian Asset Management Inc. and Yousif Capital Management LLC, have reduced their stakes in the company. However, a new corporate alliance with Rasmussen University may bring benefits to eligible team members. Brokerages have given the stock a consensus rating of "Hold" (MarketBeat.com).

1.c. Company Highlights

2. Hilton Grand Vacations' 2025 Earnings: A Strong Year of Execution

Hilton Grand Vacations (HGV) reported a robust financial performance in 2025, with adjusted EBITDA reaching $1.15 billion, a 4% growth over the prior year. The company's contract sales also grew 10% to $3.4 billion, driven by a strong tour flow. In Q4 2025, total revenue before cost reimbursements grew 1% to $1.3 billion, with adjusted EBITDA to shareholders growing 12% to $324 million. The actual EPS came out at $0.88, slightly lower than the estimated $1.05. The company's guidance for 2026 expects low single-digit contract sales growth and mid-single-digit EBITDA growth, indicating a continued momentum in the business.

Publication Date: Mar -01

📋 Highlights
  • 2025 Adjusted EBITDA Growth: Achieved $1.15 billion, a 4% increase from the previous year.
  • Contract Sales Progress: Rose to $3.4 billion (10% growth), driven by a 2% Q4 increase to $852 million.
  • Shareholder Returns: Returned $600 million in capital, meeting annual targets through buybacks and dividends.
  • Cost Synergy Milestone: Exceeded $100 million in annualized savings from the Bluegreen acquisition, ahead of schedule.
  • 2026 Guidance: Projects low single-digit contract sales growth and mid-single-digit EBITDA growth, with EBITDA range of $1.185–$1.225 billion.

Financial Performance Highlights

The company's financial performance was characterized by a strong growth in contract sales, driven by a 9% increase in tours in Q4 2025. The adjusted EBITDA margin remained consistent, reflecting the company's focus on operational excellence. The return of $600 million of capital to shareholders in 2025 demonstrates the company's commitment to returning value to its investors.

Guidance and Outlook

HGV provided guidance for 2026, expecting adjusted EBITDA before deferrals to be between $1.185 billion and $1.225 billion. The company expects low single-digit contract sales growth, driven by tour flow, and VPG to be down slightly. The guidance assumes that the company will maintain adjusted EBITDA margins consistent with 2025 due to efficiency initiatives. The quarterly cadence expectation is for contract sales and EBITDA in Q1 to be flat to slightly down, then improving sequentially in each successive quarter.

Valuation and Liquidity

The company's valuation metrics indicate a reasonable pricing. The P/E Ratio is 17.11, and the EV/EBITDA is 2.93, suggesting that the company's earnings and cash flow are reasonably valued. The liquidity position is strong, with over $1 billion in liquidity, consisting of $239 million of unrestricted cash and $809 million of availability under the revolving credit facility. The debt balance is $4.5 billion corporate debt and $2.7 billion nonrecourse debt.

Strategic Priorities

HGV's strategic priorities include attracting new customers, enhancing the lifetime value of their member base, product evolution and innovation, and driving operational excellence. The company achieved a $100 million run rate cost synergy target from the Bluegreen acquisition, several months ahead of schedule. The buyback program will continue at $150 million per quarter, demonstrating the company's commitment to returning value to its investors.

3. NewsRoom

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Buybacks Can Power Hilton Grand Vacations Higher (Upgrade)

Feb -27

Source: seekingalpha.com

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Hilton Grand Vacations Inc. (HGV) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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Hilton Grand Vacations (HGV) Reports Q4 Earnings: What Key Metrics Have to Say

Feb -26

Source: zacks.com

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Hilton Grand Vacations (HGV) Q4 Earnings and Revenues Lag Estimates

Feb -26

Source: zacks.com

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Hilton Grand Vacations Reports Fourth Quarter and Full Year 2025 Results

Feb -26

Source: businesswire.com

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Hilton Grand Vacations (HGV) Q4 Earnings on the Horizon: Analysts' Insights on Key Performance Measures

Feb -25

Source: zacks.com

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Hilton Grand Vacations Is This Portfolio's Largest Holding as Stock Climbs 15% in One Year

Feb -20

Source: fool.com

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3 Leisure Stocks Set to Outperform Q4 Earnings Expectations

Feb -17

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.17%)

6. Segments

Real Estate Sales and Financing

Expected Growth: 7.4%

Growing demand for vacation ownership, increasing popularity of timeshare models, and Hilton's strong brand reputation drive growth in the real estate sales and financing services segment.

Resort Operations and Club Management

Expected Growth: 4.5%

Growing demand for luxury vacation experiences, increasing popularity of timeshare models, and Hilton Grand Vacations' strong brand reputation drive growth in the resort operations and club management segment.

Reconciling Items

Expected Growth: 4.5%

The growth of reconciling items from Hilton Grand Vacations Inc. is driven by increasing adoption of digital payment systems, rising demand for accurate financial reporting, and growing need for compliance with regulatory requirements.

Intersegment Eliminations

Expected Growth: 4.5%

The removal of intercompany transactions and balances between different business segments of Hilton Grand Vacations Inc. is expected to drive growth, driven by increasing demand for timeshare and vacation ownership, expansion into new markets, and strategic partnerships.

7. Detailed Products

Timeshare Ownership

Hilton Grand Vacations offers a points-based ownership program, allowing members to purchase a share of a vacation home and access to a network of resorts and travel opportunities.

Club Membership

Hilton Grand Vacations offers a club membership program, providing access to a network of resorts, travel discounts, and exclusive benefits.

Vacation Packages

Hilton Grand Vacations offers customized vacation packages, including accommodations, activities, and experiences at its resorts.

Resort Rentals

Hilton Grand Vacations offers rental accommodations at its resorts, available for nightly or weekly stays.

Travel Services

Hilton Grand Vacations offers travel planning services, including booking flights, car rentals, and activities.

8. Hilton Grand Vacations Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hilton Grand Vacations Inc. faces moderate threat from substitutes, as customers have various options for vacation ownership and travel accommodations.

Bargaining Power Of Customers

Hilton Grand Vacations Inc. has a large customer base, but customers have significant bargaining power due to the availability of alternative vacation options.

Bargaining Power Of Suppliers

Hilton Grand Vacations Inc. has a strong negotiating position with its suppliers, given its large scale of operations and established relationships.

Threat Of New Entrants

The threat of new entrants is low for Hilton Grand Vacations Inc., as the vacation ownership industry has significant barriers to entry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The vacation ownership industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry for Hilton Grand Vacations Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 68.20%
Debt Cost 5.56%
Equity Weight 31.80%
Equity Cost 13.69%
WACC 8.15%
Leverage 214.42%

11. Quality Control: Hilton Grand Vacations Inc. passed 5 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

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A-Score: 3.8/10

Value: 3.6

Growth: 5.6

Quality: 3.2

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Volatility: 5.3

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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

44.64$

Current Price

44.64$

Potential

-0.00%

Expected Cash-Flows