By Dan Victor

Predicting stock prices is tough enough. It turns out that betting on weather patterns is even more difficult.

Last July, we selected Vail Resorts as a Barron's stock pick. Our bullish thesis at the time was straightforward: Following a postpandemic malaise, shares of the ski industry company and its 6% yield looked like a bargain. We believed the return of longtime CEO Rob Katz to a day to day operational set the stage for sustained rally ahead of the winter ski season.

That didn't quite work out. Shares of the world's largest ski resorts operator have underperformed, down about 12% since our pick. That's well worse than the SPDR S&P 500 ETF Trust's 11% return and State Street Consumer Discretionary Select Sector SPDR ETF's 7% gain over the same period.

The company will likely be fine in the long run, but there doesn't seem to be a catalyst for the stock to rebound soon. We no longer recommend buying shares and think investors may find better opportunities elsewhere.

Even as the Eastern U.S. deals with a deep freeze, Western states including Vail's core operating market in the Colorado Rockies face a historically warm stretch with dismal snow levels. According to OnTheSnow, a ski industry publication, snowpack levels across Colorado as of Feb. 9 were 39% of normal. Ski enthusiasts can still make a trip to get their fix on the slopes this year, but the fresh powder days that traditionally pull in the big crowds have been few and far between.

In January, management acknowledged the challenge, with an operational update noting "one of the worst early season snowfalls in the western U.S. in over 30 years." Season to date total ski visits were down 20% year over year through Jan. 5, with double-digit declines in ski school and dining revenue compared with the prior year period.

That being said, it isn't all patches of dirt. Even with the sharp drop in ski traffic, the company anticipates total lift revenue to fall a relatively modest 1.8% year over year, while projecting full year resort earnings before interest, taxes, depreciation, and amortization (Ebitda) "just below the low end" of previously issued guidance between $842 million to $898 million. A target that at the midpoint, is roughly flat from fiscal 2025.

That resiliency stems from the continued success of the company's Epic pass season lift ticket that provides resort access to members. Despite a 2% decline in North American unit pass sales for this ski season compared with last year, a 7% average price hike has helped offset the trend.

"Given how weak snowfall has been for Colorado and Utah, the financial impact could have been much worse," says Patrick Scholes, an analyst at Truist. His note from January reported how EPIC pass members now account for 74% of Vail's resort visitation mix, compared with under 60% in 2020 as a prepandemic benchmark, with the result the company's annual revenue is less reliant on snowfall-dependent visitation. The company is also more diversified with international properties, a strong point for the company's fundamental profile.

Scholes argues that expectations have been reset, positioning Vail for stronger results going forward. Truist maintains a buy rating on Vail Resorts stock with a price target of $234, implying 68% upside from the recent prices.

We've grown doubtful. The concern now is that earnings remain pressured, with the market likely looking ahead to next year's guidance. Vail reports its fourth quarter results sometime in mid March. Considering the number resort visitors that may have been underwhelmed by their suboptimal experience this year, there's little reason to believe skiers will be lining up in large numbers to renew their EPIC pass for the 2026-2027 ski season.

Blame it on climate change or just bad luck if you like. Either way, another winter with low snowfall totals next year would almost certainly force the stock to reprice lower. It's fair to question whether the drop in skier visit points to a secular issue beyond just the snowfall.

To be sure, there's a case to be made that the company's assets of world class mountain properties remain undervalued. The 6% yielding dividend also looks sustainable for now.

But those factors alone may not be enough. The stock looks to be on thin ice and warmer summer months are just around the corner.

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February 09, 2026 23:50 ET (04:50 GMT)

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