Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.0 |
| P/S | 9.7 |
| EV/EBITDA | 5.8 |
| Fwd P/E | 9.6 |
| PEG | 4.3 |
| Analyst target | 6.0 |
- ▸Forward P/E: 7.8x
- ▸PEG: 2.16
TNL · Why this verdict
Why Travel Leisure (TNL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↑Improving |
| 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.
↑ImprovingBear 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
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 4.9 |
| Gross margin | 6.3 |
| Op margin | 7.7 |
| Net margin | 2.8 |
| Current ratio | 8.4 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 348% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
3.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 2.7 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 8.5 |
| Price target | 8.1 |
- ▸Analyst upside: 24%
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.3 |
- ▸Notable insider selling — $8,575,812 (0.208% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 2.5 |
| growth rank | 3.3 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 7.8 |
| gap | 5.0 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.3 |
| days to cover | 0.9 |
| volatility | 5.4 |
| put call | 10.0 |
| implied vol | 6.2 |
| max pain risk | 3.0 |
| beta | 6.2 |
| news risk | 6.0 |
- ▸Above max pain $35
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.8 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 3.6%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:110d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.6<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.5>=5.0 recovering
Reward-to-Risk
0.62
Upside
+7.7%
Downside
12.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 75
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.1B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.6<1.5@spot) reinforce the read. Current asymmetry R:R is 0.62 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.3, Quality at 7.1, and Value at 7.0; the weakest are Technical at 3.2, Growth at 3.3, and Insider at 3.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.62 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Financial Health Score
Trip ifPiotroski F-Score falls below 7 in the next annual reporting period, indicating broad-based financial deterioration.
- P2Strong Free Cash Conversion
Trip ifFree cash flow conversion drops below 100% of net income for 2 consecutive quarters.
- P3Earnings Beat Streak
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P4Geographic Concentration Risk
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.