Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Vail Resorts Jumped 16.0% in May

By Travis Hoium – Updated Jun 8, 2020 at 9:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Reopening the economy should be good for all travel stocks.

What happened 

Shares of Vail Resorts (MTN 6.10%) jumped 16% in May, according to data provided by S&P Global Market Intelligence, recovering some of what the stock lost in March and April. But even after the gain, shares are down 18% for the year. 

So what 

May was a quiet month for Vail Resorts, but for the market overall it was eventful. Investors piled back into stocks in anticipation of the economy reopening and hopefully a strong recovery. Not surprisingly, a stock like Vail Resorts, which was hit hard during COVID-19 shutdowns, has performed well during the market bounce. 

Skier jumping off small cliff on a mountain.

Image source: Getty Images.

On June 4, we did get a glimpse of the first quarter of 2020, which ended on April 30, and it wasn't good. Revenue was down 27.5% to $694.1 million, and net income fell by 47.8% to $152.5 million. Given that resorts were shut down on March 15, it's remarkable that results weren't even worse. 

Now what 

There will be a lasting impact on business for Vail Resorts because last year's season-pass holders will be offered a discount for next season as a result of the early shutdown. But there's been some positive news now that we know COVID-19 is less likely to spread outdoors, where most of Vail's activities take place. 

It's still uncertain how quickly travel and consumer discretionary stocks will recover given the fact that COVID-19 is likely still going to be around when winter ski season starts again. But the fact that the economy and resorts are reopening was welcome news for investors last month. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends Vail Resorts. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vail Resorts, Inc. Stock Quote
Vail Resorts, Inc.
MTN
$224.69 (6.10%) $12.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.