Expedition travel company Lindblad Expeditions (LIND -0.55%) has benefited from a recent wave of adventure tourism, now offering additional land-based adventures to complement its ever-evolving ocean voyages.
Despite marked company advancements and reduced pandemic limitations, Lindblad stock trades more than 51% below its March 2021 all-time high. Here's why I'm bullish on this cruise line stock.
1. Substantial gains in Q1
In an impressive 111% gain over last year, Lindblad drove record first-quarter revenue of $143 million. During the company's Q1 earnings call in early May, CFO Craig Felenstein attributed the surge in revenue to the company's "expanded fleet and additional land-focused offerings."
Cruise revenue landed at $116 million for a 130% year-over-year improvement, and land experiences revenue finished at $28 million for a 59% gain. CEO Dolf Berle highlighted how first-quarter results marked "all-time highs for Lindblad Expeditions in both revenue and EBITDA."
Ending the first quarter at $27 million, earnings before interest, taxes, depreciation, and amortization (EBITDA) showed a $48 million gain over the prior-year period's $21 million EBITDA loss. Beyond surpassing last year's numbers, EBITDA also topped Q1 2019's figure by 23%.
2. An expanding fleet and growing land offerings
Lindblad Expeditions also took the pandemic shutdown to retool and upgrade its services. As Felenstein explained, "The targeted strategic investments we made during the pandemic to dramatically increase the capacity of our fleet and to broaden our portfolio of product offerings has significantly expanded the earnings potential of the company."
As a result of expansion efforts, Lindblad enjoyed a 71% year-over-year increase in available guest nights, a measure of capacity based on cabin availability. Guest nights sold jumped 108% in the first quarter, and occupancy increased 15 percentage points versus Q1 2022 to reach 81%.
In addition to being an expedition cruise operator, Lindblad owns a growing portfolio of land-based subsidiaries. After purchasing Natural Habitat Adventures in 2016, the company acquired Off the Beaten Path, DuVine Cycling + Adventure, and Classic Journeys in 2021.
Felenstein described how the company further integrated its three new land-focused companies last quarter, "driving more guests across our product portfolio." And thanks to an increase in travelers wishing to see the Northern Lights in Canada and Monarch butterflies in Mexico last quarter, Lindblad's land segment outperformed during a seasonally slow period.
3. Bookings outpace 2019 levels
As of the company's earnings call in early May, bookings for Lindblad voyages hovered 45% higher than pre-pandemic bookings in 2019 (for trips in 2020). And cancellations have fortunately dropped as well.
Berle pointed out that after cancellations had "more than doubled as a percentage of booked revenue late last year," they are now "settling down significantly." He explained how a diminishing COVID-19 threat and Lindblad reverting to a "more industry-norm cancellation policy" helped drop cancellations.
Additionally, with the recent launch of Lindblad's Seaware reservation and booking system, guests will soon be able to seamlessly book a trip, select a cabin, and access promotional offers online. Anticipated to roll out in the second quarter, Seaware will enable Lindblad to "implement modern dynamic pricing practices, enhancing our ability to reach higher levels of revenue yield on voyages across the globe," according to Berle.
