Hilton Grand Vacations Inc. (HGV): what the price requires
The current priced-in claim for Hilton Grand Vacations Inc. (HGV) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/HGV
Headline
| Field | Value |
|---|---|
| Ticker | HGV |
| Company | Hilton Grand Vacations Inc. |
| Current price | $49.62/sh |
| Composition | Real estate sales and financing 66% / Resort operations and club management 34% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 3.8% |
| Operating margin (mid-cycle) | 12.5% |
| Margin compression implied | -8.7pp |
| Trailing margin (depressed year) | 3.1% |
| Multiple paid | 13x mid-cycle operating income |
The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7.2% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.29σ |
| cohort percentile (of 212 peers) | 27 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.99x | 4 | expensive |
| Earnings | 1.66x | 2 | expensive |
| Relative | 1.48x | 4 | expensive |
| Growth | 0.97x | 2 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.1%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $66.13 | 0.75x | yes | Exit EV/EBITDA: 29.2x / 31.2x / 33.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $20.99 | 2.36x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.1x / 18.0x / 20.9x (bear / base = reference held flat / bull), EV/EBITDA 17.77x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $21.18 | 2.34x | yes | BV/sh $14.30, ROE (TTM) 13.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $25.53 | 1.94x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $41.52 | 1.20x | yes | Rev $5.2B, growth 4% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $22.20 | 2.24x | yes | EPS $1.85, growth 2% (input: historical EPS growth), PEG=12.66 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $26.40 | 1.88x | yes | BV $14.30 + 5yr PV of (ROE (TTM) 13.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $24.40 | 2.03x | yes | √(22.5 × EPS $1.85 × BVPS $14.30) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 4962.00x | yes | EBITDA $0.28B × sector EV/EBITDA 12.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 4962.00x | yes | FCF $328.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 4962.00x | yes | SBC-adj FCF $0.27B (FCF $0.33B − SBC $0.06B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $59.69 | 0.83x | yes | EPS $1.85 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $154.84 | 0.32x | yes | Revenue $5.18B × sector P/S 2.5x |
| PEG Fair Value | Relative | $69.38 | 0.72x | yes | EPS $1.85 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $20.00 | 2.48x | yes | EPS $1.85 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $4.5b |
| Net debt / NOPAT (after-tax) | 7.80x |
| Net debt / operating income (pre-tax) | 7.17x |
| Interest coverage | 2.0x |
| Share count CAGR (buyback) | -9.0% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 12.5%); the trailing year was depressed.
Bullet Takeaways
- Hilton Grand Vacations sells timeshare interests under the Hilton brand and ran its HGV Max membership base up 29% year over year to 277,000, the engine that turns one-time buyers into recurring resort and club revenue.
- The defining risk is leverage: net debt sits around 7 times mid-cycle operating income with interest coverage near 2 times, a heavy load for a cyclical seller of discretionary leisure.
- Watch contract sales and the per-guest sales metric: management raised full-year adjusted EBITDA guidance to $1.225 billion to $1.265 billion even as it expects sales productivity to dip mid-year before recovering.
Bull Case
The moat for Hilton Grand Vacations is the brand it licenses and the membership network it has built underneath it. Members buy a vacation ownership interest and gain the flexibility to exchange it for stays across Hilton Grand Vacations resorts and, through the affiliation, properties in the broader "Hilton system of 25 industry-leading brands with over 9,000 prop"erties. That access is what a standalone timeshare operator cannot replicate: the Hilton name de-risks the purchase for the buyer and the Honors integration gives existing members a reason to stay and spend. The HGV Max membership base grew 29% year over year to 277,000, and new-buyer transactions rose 8% to the highest first-quarter level since 2023. A growing, recurring membership base is the part of the timeshare model that compounds.
The acquisitions have built real scale. Hilton Grand Vacations folded in Diamond Resorts and then Bluegreen Vacations, and in the latest quarter bought the remaining 75% of the Elara joint venture in Las Vegas, moving that project from fee-for-service to fully owned and capturing the complete real-estate and financing economics. Each deal adds inventory, members, and the high-margin financing and resort-management revenue that comes with a larger book. The financing arm is itself a profit engine: HGV originates loans to its own buyers and securitizes them as non-recourse debt, recycling capital while keeping the interest spread.
The valuation is where the bull case gets its edge. On a normalized, through-cycle basis the price works out to about 14 times operating income, low enough that it sits below what even a modest annual decline in operating profit would warrant. Only the growth-oriented method reaches the current price, while the asset-value and earnings methods read the depressed trailing year and call it expensive, which is exactly the trap with a cyclical at a soft point. Management raised full-year adjusted EBITDA guidance to $1.225 billion to $1.265 billion, and the share count has fallen about 9% a year on aggressive buybacks. A scaled, brand-backed, cash-generative membership business buying back stock while trading below its normalized earnings power is the durable compounding the static frames miss.
Bear Case
The competitive threat that should worry a Hilton Grand Vacations holder is hiding in its own licensing agreement: the brand it depends on can become its rival. The filing states plainly that "Hilton has the right to terminate the exclusivity and compete with us in the timeshare business using the Licensed Marks." The entire premium of the model rests on the Hilton name, and that name is licensed, not owned. Beyond Hilton itself, the timeshare industry is crowded with Marriott Vacations, Travel and Leisure, and others competing for the same discretionary leisure dollar, and the product carries a persistent consumer-perception problem and high marketing costs to overcome it. A moat built on a license is only as durable as the license-holder's patience.
The deeper structural risk is leverage stacked on a cyclical, financed customer. Net debt sits near 7 times mid-cycle operating income with interest coverage of only about 2 times, a heavy load for a company selling a big-ticket discretionary product. Worse, Hilton Grand Vacations is also a consumer lender to its own buyers, originating timeshare financing receivables and securitizing them. In a recession the two risks compound: contract sales fall as consumers cut discretionary spending, and loan defaults rise on the financing book at the same time, hitting both halves of the business when the balance sheet has the least room to absorb it.
The near-term sales signal is already softening. Management expects its per-guest sales productivity to decline in the low-to-mid single digits in the second and third quarters before recovering in the fourth as it laps the Bluegreen Max launch. That is a candid admission that the integration tailwind is fading and the core selling metric is under pressure. The price is read off a normalized, through-cycle margin, which flatters a company whose trailing operating margin is only about 3%; if the cycle does not cooperate and the normalized margin proves optimistic, the heavy debt turns a cyclical downturn into an equity problem far faster than the cheap-looking multiple suggests.
Valuation
At about $52.76 (June 27, 2026) Hilton Grand Vacations trades near 14 times company-wide mid-cycle operating income, a multiple low enough that the price sits below what even a 5% annual decline in operating profit would warrant. The inversion uses normalized, through-cycle margins rather than the depressed trailing year, because the timeshare cycle and the Bluegreen integration have suppressed the reported numbers. On that basis the price looks like a value setup, with the near-term pace within what the company has delivered and the only question being how long the mid-cycle conditions hold.
The method spread reflects the cyclical distortion. Only the growth-oriented cash-flow method reaches the price. The asset-value, earnings-power, and peer-multiple methods all read the stock as expensive, because they anchor on a trailing operating margin of only about 3% that does not represent the business at mid-cycle. Several of the earnings-based readings are not usable here at all because the depressed trailing figure produces nonsensical outputs, which is itself the signal that trailing earnings are the wrong base. The peer cohort the screen surfaces leans toward casinos and full-service hotels rather than timeshare operators, so the cleaner comparison is to dedicated vacation-ownership peers. The honest framing is that the price is supported by the normalized earnings power and looks cheap there, while the trailing-based methods flag it as dear, and the gap is the cycle.
Solvency is the load-bearing concern and the reason the cheap multiple deserves caution. Net debt of about $4.5 billion sits at roughly 7 times mid-cycle operating income, with interest coverage near 2 times, a thin cushion. Part of the structure is non-recourse securitized financing tied to the consumer loan book, which mitigates some of the corporate risk, but the leverage is still high for a discretionary cyclical. The company is not burning cash, and the share count has fallen about 9% a year on buybacks, which is where management directs its free cash flow. What a buyer underwrites at this price is a brand-licensed timeshare operator that looks inexpensive on normalized earnings, financed with substantial debt, where the leverage and the consumer-credit exposure are the things that turn a cyclical soft patch into something worse.
Catalysts
Hilton Grand Vacations beat expectations in its first quarter of 2026, with total contract sales of $719 million, total revenues of $1.285 billion, and diluted EPS of $0.79, or $0.99 on an adjusted basis. The standout operating metric was membership: the HGV Max base grew 29% year over year to 277,000, with high-single-digit tour growth and an 8% rise in new-buyer transactions, the strongest first-quarter new-buyer level since 2023. The cause behind the strength was the integrated product offering and enhanced Hilton Honors benefits drawing in new members.
The strategic development was the acquisition of the remaining 75% of the Elara joint venture in Las Vegas, which converts that project from fee-for-service to fully owned, capturing the complete real-estate and financing economics. On the back of the Q1 outperformance and the Elara contribution, management raised full-year 2026 adjusted EBITDA guidance to a range of $1.225 billion to $1.265 billion.
The forward catalysts to watch are the trajectory of per-guest sales productivity, which management expects to decline in the low-to-mid single digits in the second and third quarters before returning to growth in the fourth as it laps the Bluegreen Max launch, the pace of HGV Max member additions, and the health of the consumer financing book. Discretionary leisure demand and the interest-rate environment are the external variables with the most leverage on both contract sales and loan performance.
Peer Cohorts (Per Segment, With Filing Citations)
Real estate sales and financing / Resort operations and club management (reported)
- TNL (Travel & Leisure Co.)
- FY2025 10-K: …the selection, processing and servicing of loans pledged in our warehouse and term securitization facilities. We assess the performance of our loan portfolio by monitoring numerous metrics including collection rates, defaults by state of residency, and bankruptcies. Our loan portfolio was 94% and 95% current (not…
- FY2025 10-K: …are regulated under a number of different timeshare, condominium, and land sales disclosure statutes in many jurisdictions. We are generally subject to laws and regulations applicable to real estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions,…
- VAC (MARRIOTT VACATIONS WORLDWIDE CORP)
- FY2025 10-K: …customer support services, including reservations, and certain transaction-based expenses relating to third-party exchange service providers. In our Vacation Ownership segment and Consolidated Property Owners' Associations, we refer to these activities as "Resort Management and Other Services." Financing We offer…
- FY2025 10-K: …acts or practices, including unfair or deceptive trade practices and unfair competition, state attorney general regulations, anti-fraud laws, anti-discrimination, prize, gift and sweepstakes laws, real estate, title agency or insurance, travel insurance and other licensing or registration laws and regulations,…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
HGV Q1 2026 results, April 2026 · HGV FY2025 10-K · HGV Q1 2026 earnings release, April 2026