Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.1 |
| P/S | 9.5 |
| EV/EBITDA | 5.3 |
| Fwd P/E | 9.4 |
| PEG | 9.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.0x
- ▸PEG: 0.65
- ▸Attractively valued
TNL · Why this verdict
Why Travel Leisure (TNL) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Travel + Leisure Co. is a high-quality vacation ownership business with a Piotroski F-Score of 9 out of 9, free cash flow conversion of 225% of net income, and three consecutive earnings beats, yet the stock is overbought at an RSI of 76 and has nearly fully closed the gap to analyst price targets, leaving limited near-term upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A Piotroski F-Score of 9 out of 9 — the highest possible rating — indicates that Travel + Leisure's balance sheet, profitability, and operational efficiency are all improving simultaneously, placing it in the top tier of financial health among consumer cyclical companies. Quality breakdown | Piotroski F-Score remains at 8 or above over the next two annual reporting cycles. | →Stable |
| CounterPiotroski scores for consumer cyclical companies can deteriorate quickly if interest rates rise or discretionary spending slows, as vacation ownership is among the first categories consumers cut in a downturn. | ||
With 88% of revenues derived from the United States, Travel + Leisure is highly exposed to a single economic environment, meaning a domestic recession or consumer sentiment shock would have an outsized impact compared to more geographically diversified peers. Bear case | Non-U.S. revenue share grows to above 15% within 12 months, reducing single-market dependence. | →Stable |
| CounterGeographic concentration in the U.S. vacation ownership market can also be a strength, providing operational focus and avoiding currency and political risks that come with international diversification. | ||
Free cash flow conversion of 225% of net income demonstrates that earnings are substantially backed by cash, supporting both dividend payments and debt reduction without relying on accounting gains. Quality breakdown | Free cash flow conversion remains above 150% of net income over the next four quarters. | →Stable |
| CounterVacation ownership companies can generate high near-term cash flows while accumulating consumer receivables that carry credit risk; a rise in defaults or delinquencies could impair future cash generation. | ||
Travel + Leisure has beaten earnings estimates in three of the last four quarters with an average positive surprise of 3.7%, providing evidence that management's guidance is reliable and conservative. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with the average positive surprise staying above 2%. | →Stable |
| CounterThe one miss was by only 0.39% and the average surprise is low at 3.7%, suggesting the beat streak may reflect narrow estimate beats rather than a durable outperformance pattern. | ||
A Piotroski F-Score of 9 out of 9 — the highest possible rating — indicates that Travel + Leisure's balance sheet, profitability, and operational efficiency are all improving simultaneously, placing it in the top tier of financial health among consumer cyclical companies.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 8 or above over the next two annual reporting cycles.
CounterPiotroski scores for consumer cyclical companies can deteriorate quickly if interest rates rise or discretionary spending slows, as vacation ownership is among the first categories consumers cut in a downturn.
With 88% of revenues derived from the United States, Travel + Leisure is highly exposed to a single economic environment, meaning a domestic recession or consumer sentiment shock would have an outsized impact compared to more geographically diversified peers.
→StableBear case
- Expectation
- Non-U.S. revenue share grows to above 15% within 12 months, reducing single-market dependence.
CounterGeographic concentration in the U.S. vacation ownership market can also be a strength, providing operational focus and avoiding currency and political risks that come with international diversification.
Free cash flow conversion of 225% of net income demonstrates that earnings are substantially backed by cash, supporting both dividend payments and debt reduction without relying on accounting gains.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income over the next four quarters.
CounterVacation ownership companies can generate high near-term cash flows while accumulating consumer receivables that carry credit risk; a rise in defaults or delinquencies could impair future cash generation.
Travel + Leisure has beaten earnings estimates in three of the last four quarters with an average positive surprise of 3.7%, providing evidence that management's guidance is reliable and conservative.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with the average positive surprise staying above 2%.
CounterThe one miss was by only 0.39% and the average surprise is low at 3.7%, suggesting the beat streak may reflect narrow estimate beats rather than a durable outperformance pattern.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 5.1 |
| Gross margin | 6.1 |
| Op margin | 7.5 |
| Net margin | 2.9 |
| Current ratio | 9.8 |
| FCF quality | 10.0 |
| Moat | 5.9 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 225% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
4.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 4.8 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.8 |
| erm sentiment | 4.9 |
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.9 |
| holder change | 5.1 |
- ▸Modest insider selling — $3,803,932 (0.079% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.5 |
| quality rank | 3.3 |
| growth rank | 1.3 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 0.9 |
| 52w position | 9.4 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.1 |
| days to cover | 6.1 |
| volatility | 5.3 |
| put call | 10.0 |
| implied vol | 6.7 |
| max pain risk | 3.0 |
| beta | 6.2 |
- ▸Above max pain $42
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.4 |
| dividend safety | 4.2 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.14
Upside
-1.9%
Downside
13.5%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeCATALYST — Earnings in 27d with 3/4 beat streak
SuitabilityAGGRESSIVE — MCap $4.8B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.6>=5.5. Top dim: Value at 7.3; weakest: Technical at 3.9. No conviction either direction.
The strongest dimensions are Value at 7.3, Quality at 7.2, and Momentum at 6.6; the weakest are Technical at 3.9, Peer rank at 4.0, and Growth at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A Piotroski F-Score of 9 out of 9 — the highest possible rating — indicates that Travel + Leisure's balance sheet, profitability, and operational efficiency are all improving simultaneously, placing it in the top tier of financial health among consumer cyclical companies.
Trip ifPiotroski F-Score falls below 7 in the next annual reporting period, indicating broad-based financial deterioration.
- P2Free cash flow conversion of 225% of net income demonstrates that earnings are substantially backed by cash, supporting both dividend payments and debt reduction without relying on accounting gains.
Trip ifFree cash flow conversion drops below 100% of net income for 2 consecutive quarters.
- P3Travel + Leisure has beaten earnings estimates in three of the last four quarters with an average positive surprise of 3.7%, providing evidence that management's guidance is reliable and conservative.
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P4With 88% of revenues derived from the United States, Travel + Leisure is highly exposed to a single economic environment, meaning a domestic recession or consumer sentiment shock would have an outsized impact compared to more geographically diversified peers.
Trip ifU.S. consumer confidence index falls below 85, more than 15% below recent levels, signaling a discretionary spending contraction that would disproportionately affect this company.