B.Riley bullish on Lindblad Expeditions Holdings despite share price cut

On Wednesday, B.Riley revised its outlook on Lindblad Expeditions Holdings (NASDAQ: ), lowering the price target to $13.00 from the previous $14.00 while maintaining a Buy rating on the stock.

The adjustment comes after the company released its first-quarter 2024 earnings, which reported consolidated results that didn't quite meet expectations. The company acknowledged that while Lindblad's revenue beat expectations, the segment's costs were higher than expected due to the timing of quarterly expenses.

The company's recent results include positive developments such as increased visibility in travel bookings this year. Additionally, Lindblad has made progress in integrating sales and marketing efforts with National Geographic and Disney, a move it expects to aid future growth.

Additionally, the acquisition of another land-based travel business and increasing ownership of two additional land-based businesses are seen as strategic steps to improve long-term profitability.

Despite these positive metrics, B.Riley has chosen to take a more conservative stance on Lindblad's future earnings before interest, taxes, depreciation, and amortization (AEBITDA), resulting in slightly lower estimates for 2024 and 2025. Consider the potential challenges of income mobility.

Analysts at B.Riley stressed that Lindblad's current valuation multiple discount compared to the mass cruise industry is unwarranted. The analyst emphasized that the discount does not accurately represent Lindblad's potential to capture a larger share of the adventure travel market in the coming years.

Despite the lower target price, the company reiterated its confidence in the company's strategic direction and maintained a buy rating.

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