Small-cap Resorts & Casinos company Bluegreen Vacations is down -4.16% during this morning's trading session, while the S&P 500 moved 0.11%. With last year's reported gross margins at 36.42%, you might be wondering if today's drop is an opportunity to pick up shares of a profitable company at a discount.
Gross margins give insight into the basic economics of the company' product line and its pricing power in the target market, yet it's essential to balance this with a review of Bluegreen Vacations's operating margins. Operating margins take into account the company's fixed overhead costs, in addition to the cost of revenue used to calculate gross margins.
Is Bluegreen Vacations saddled with bloated overhead expenses that are eating away at an otherwise profitable business? Or is the company currently unprofitable because it is in a growth phase? A combined analysis of both gross and operating margins can help answer these questions, so that you understand what kind of business you are investing in.
| Date Reported | Revenue (k) | Cost of Revenue (k) | Gross Margin | YoY Growth |
|---|---|---|---|---|
| 2021-12-31 | $757,113 | $481,406 | 36.42% | 76.37% |
| 2020-12-31 | $519,471 | $412,179 | 20.65% | 1304.76% |
| 2019-12-31 | $737,771 | $726,915 | 1.47% | -84.89% |
| 2018-12-31 | $734,302 | $662,827 | 9.73% | 5.3% |
| 2017-12-31 | $868,769 | $788,516 | 9.24% | n/a |
Bluegreen Vacations's gross margins have a coefficient of variability of 87%, with a low percentage rate being more desirable as it indicates stability. Revenues have a delta of 0.23% while cost of revenue is shrinking at a rate of -7%, which allows for the company's gross margins to grow at an average 260.31% per year.
| Date Reported | Revenue (k) | Operating Expenses (k) | Operating Margin | YoY Growth |
|---|---|---|---|---|
| 2021-12-31 | $757,113 | $554,419 | -36.78% | 48.2% |
| 2020-12-31 | $519,471 | $476,392 | -71.01% | 17.91% |
| 2019-12-31 | $737,771 | $639,605 | -86.5% | -21.95% |
| 2018-12-31 | $734,302 | $594,045 | -70.93% | -23.77% |
| 2017-12-31 | $868,769 | $576,994 | -57.31% | n/a |
The table above tells us that, on average, Bluegreen Vacations has not been profitable over the last four years, which should be a warning sign to prospective investors. One bright spot, however, is that the company's operating margins are growing at an average yearly rate of 4.08%.
