VAC Cements CEO Amid Mounting Turnaround Pressure, No Quick Fixes in Sight

What happened

Marriott Vacations Worldwide has appointed Matthew Avril as permanent CEO after his interim role since November 2025, formalizing leadership during a critical operational slump. The DeepValue report reveals VAC's core metrics are deteriorating, with 3Q25 VPG down 5% YoY and EBITDA margin at 20.9%, far from the 22% threshold needed for upside. Avril's appointment follows a period of insider buying in late 2025, but the company faces steep challenges including high leverage at 4.1x net debt/EBITDA and modernization cash costs of ~$100M annually through 2026. Management's recent track record shows failed stabilization efforts, with both tours and VPG declining in recent quarters despite initiatives like FICO-based lead screening. This move signals board continuity but does not address the underlying sales engine weakness or securitization risks that could trap cash.

Implication

The leadership change provides no immediate operational relief, as VAC's turnaround hinges on demonstrable VPG inflection by mid-2026, which remains unproven. Without rapid progress, the bear case—with VPG stuck below $3,700 and margin near 20%—becomes more likely, threatening equity value. High leverage and modernization expenses will continue to constrain free cash flow, limiting flexibility even if ABS access stays open. Investors must scrutinize upcoming quarters for evidence that Avril's initiatives boost close rates without higher marketing spend, as peer HGV outperforms. Failure to meet these benchmarks could trigger securitization breaches or dilution, underscoring the need for patience and critical monitoring.

Thesis delta

The CEO appointment does not alter the fundamental WAIT thesis, which requires VPG to turn YoY positive and EBITDA margin to exceed 22% by 2Q26 for any bullish shift. It merely removes interim uncertainty but adds no new catalysts; the investment case still depends on execution fixes that have yet to show results in filed financials.