Hilton Grand Vacations Inc scores 25 for management and 57 for moat. The management score rests on a return on invested capital of 3.1% and a gross margin of 56.7% — figures that describe capital earning less than it costs to employ. The balance sheet carries debt at 5.70x equity, which magnifies both the returns above and the risk beneath them. A moderate moat alongside weak management is a combination worth understanding before the price matters at all.
Three independent anchors set the price worth paying. Growth is modelled at 15.0% a year, below the 41.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $63.60, a 10-CAP price of $51.89 and a payback time price of $81.91, with the value zone set at the highest of the three, $81.91. Today's price of $34.83 sits inside that zone.
The price sits inside the value zone, but the business scores 57 for moat and 25 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $34.83 |
| Market cap | $2.7B |
| P/E ratio | 16.4x |
| Return on invested capital | 3.1% |
| Gross margin | 56.7% |
| Debt to equity | 5.70x |
| Free cash flow yield | 5.7% |
| Growth rate used | 15.0% |
| Growth rate measured | 41.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| PotlatchDeltic Corp. (PCH) | 30 | $19.73 |
| Howard Hughes Holdings Inc (HHH) | 36 | $208.16 |
| Colliers Intl Gr-Subord Vot (CIGI) | 69 | $100.17 |
| Firstservice Corp (FSV) | 88 | $127.70 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Hilton Grand Vacations Inc rather than accepting ours.