$44.60
$143.90
bear $44.60
base $106.10
bull $143.90
margin of safety $50.00
market price* $110.93
Marriott Vacations Worldwide sells vacation ownership interests (timeshares) under the Marriott, Sheraton, Westin, Ritz-Carlton and Hyatt brands, finances many of those sales, manages the resorts, and runs the Interval International exchange network. About 70% of 2025 contract sales went to existing owners, which makes the business more of a recurring owner base than a one-time sales engine. The licenses to use the Marriott and Hyatt names are essential, and their termination is a disclosed risk. How we measure earnings. We value the company on owner earnings: operating cash flow after removing the swings from the customer loan book, inventory and other working capital, and after deducting stock compensation and the capital spending needed to keep resorts running. Because timeshare loans lose money in practice, we left the annual credit-loss provision ($222 million in 2025) as a real cost rather than adding it back. Large non-cash write-downs are added back, since they are past acquisition cost, and the risk they signal is carried in the cases below instead. Per-share figures use the basic share count because the convertible notes are treated as debt whose interest is already deducted. On that basis, owner earnings per share were about $8.24 (2019), $(2.74) (2020, pandemic), $6.00 (2021), $13.19 (2022), $6.77 (2023), $11.62 (2024) and $7.50 (2025). We use the median of 2021 to 2025, which is $7.50 per share (roughly $262 million). 2020 is excluded as a pandemic year. 2025 fell 35% from 2024, so we start the cases from the median level and do not assume a rebound. 2025 was held down by about $122 million of modernization costs (including $87 million of advisory fees), but 2026 also brings higher interest: $575 million of 6.5% notes replaced 0% convertible notes, and $575 million of 3.3% convertibles mature in 2027. We treated these as roughly offsetting and made no adjustment. What happened in 2025. The company reported a $307 million net loss, driven by $577 million of impairments: $159 million of goodwill and $21 million of trade names in the exchange and third-party management business, and $395 million tied to a change in development strategy (write-downs of non-core property, forgone future phases of existing resorts, Legacy-Welk inventory and the Asia Pacific business). Consolidated contract sales were $1,762 million, down 3%, and volume per guest fell to $3,794 from $4,088 in 2023. Exchange membership fell 2% to about 1.5 million. Revenue was $5,032 million, up 1%. In the first half of 2026, revenue rose about 5% and operating cash flow was $76 million against $(40) million a year earlier. Base case: $106.1 per share. Owner earnings stay at $7.50 and drift down 1% a year, discounted at 6%. We credit no growth: contract sales have been flat to down since 2023 and nothing secured or proven supports an increase. The 1% decline reflects falling sales per guest, declining exchange membership and amortizing acquired intangibles. The recurring base of owner sales, management fees, rentals and loan interest is why we let the earnings continue rather than fade to zero. Bear case: $44.6 per share. Owner earnings fall to about $4.65 (roughly 38% lower) and decline 4% a year. This assumes sales per guest keeps falling, higher refinancing costs on the 2027 convertibles and the 2028 and 2029 notes, more credit losses, and continued shrinkage in exchange. Leverage matters here: about $3.5 billion of corporate debt plus roughly $2.1 billion of securitized loan debt, and a 2025 rating downgrade to B+ by S&P. Repeated write-offs of acquired assets (Legacy-Welk inventory in 2024 and 2025, Interval intangibles in 2025) are also part of this downside. Even in this case the operating earnings remain positive, so the company does not appear to owe more than it is worth. Bull case: $143.9 per share. The one-time $87 million of advisory fees and related transition costs do not recur, lifting owner earnings to about $9.40, and earnings then drift down 0.5% a year. The strategy shift toward capital-efficient inventory (purchase commitments in Waikiki and Thailand are fulfilled) supports that. We do not credit a market recovery or new products. What would make this wrong. Our range depends on the owner base continuing to buy and on lenders continuing to finance the loan book. If contract sales keep falling at 3% a year with no cost offset, the bear case becomes the base. The margin-of-safety price of $50 sits about 53% below base value, reflecting leverage, credit exposure and consumer discretionary demand. Note also that we could not reconcile the full modernization program to future savings from the filings, so no savings are counted. We used the most recent annual report and second-quarter 2026 quarterly data.