The global travel and tourism industry is finally coming out of its pandemic slump. According to Statista, the sector’s revenues are expected to reach $716.80 billion this year, reflecting an impressive 45% year-over-year increase over last year’s $491.50 billion.
Bluegreen Vacations Holding Corporation (BVH) is a vacation ownership company that markets and sells vacation ownership interests (VOI) and manages resorts in leisure and urban destinations.
The company recently announced it has embarked on an expansion. BVH declared that it had acquired a 320-room resort and spa in Panama City Beach, Florida, and two buildings in the Streamside at Vail Resort enclave in Vail, Colorado.
However, the stock has declined 15.8% over the past month. It gained 1.2% intraday to close its last trading session at $17.43.
Here are the factors that could affect BVH’s performance in the near term:
Strong Past Growth Story
BVH’s revenue has grown at a 3.7% CAGR over the past three years and a 2.1% CAGR over the past five years. Its EBIT has grown at a 32.7% CAGR over the past three years. Its net income and EPS have grown at 112.2% and 107.2% CAGRs over the same period.
Broad Profit Margins
BVH’s trailing-12-month net income margin, EBIT margin, and levered FCF margin of 8.10%, 27.32%, and 10.07% are 44.1%, 236.1%, and 489.8% higher than their respective industry averages of 5.62%, 8.13%, and 1.71%.
Its trailing-12-month ROE, ROTC, and ROA of 28.90%, 14.12%, and 5.41% are 93.8%, 105.9%, and 5.6% higher than their respective industry averages of 14.91%, 6.86%, and 5.12%.
Cheap Valuations
In terms of its forward P/E, BVH is trading at 4.83x, 61% lower than the industry average of 12.39x. The stock’s forward Price/Sales multiple of 0.37 is 52.2% lower than the industry average of 0.78. In terms of its forward Price/Book, it is trading at 1.16x, 50% lower than the industry average of 2.33x.
Favorable Analyst Expectations
The consensus EPS estimates of $1.21 and $0.86 for the quarter that ended September and the quarter ending December 2022 indicate 14.2% and 45.8% year-over-year improvements. The consensus revenue estimates for the same periods of $237.07 million and $214.67 million reflect rises of 15.4% and 5.7% from their prior-year periods.
Street EPS and revenue estimates for the fiscal year 2022 of $3.70 and $882.17 million indicate 32.6% and 16.5% year-over-year increases. Its EPS is expected to grow by 10% per annum over the next five years.
POWR Ratings Reflect Promising Prospects
BVH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
BVH has a Value grade of A, in sync with its lower-than-industry valuations.
The stock also has an A grade for Sentiment and Quality, consistent with its favorable analyst sentiments and wide profit margins.
In the 21-stock Travel – Hotels/Resorts industry, it is ranked #1. The industry is rated B.
Click here to see the additional POWR Ratings for BVH (Growth, Momentum, and Stability).
View all the top stocks in the Travel – Hotels/Resorts industry here.
Bottom Line
The company’s expansionary initiatives might prove to be strategically beneficial amid the travel industry’s post-pandemic recovery. Moreover, the company possesses impressive fundamentals. With Wall Street analysts expecting a 221.3% upside in its stock price, BVH might be a solid buy now.
How Does Bluegreen Vacations Holding Corporation (BVH) Stack Up Against its Peers?
While BVH has an overall POWR Rating of A, one might consider looking at its industry peers, Playa Hotels & Resorts N.V. (PLYA) and InterContinental Hotels Group PLC (IHG), which have an overall B (Buy) rating.
BVH shares were trading at $17.83 per share on Thursday morning, up $0.40 (+2.29%). Year-to-date, BVH has declined -48.60%, versus a -22.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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