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On Thursday, Craig-Hallum initiated coverage on Pursuit Attractions and Hospitality (NYSE:PRSU) by assigning a Buy rating and establishing a $40.00 price target, representing significant upside from the current price of $27.25. The stock is trading near its 52-week low of $27.28, according to InvestingPro data. The company, formerly known as Viad Corp (VVI), recently underwent significant restructuring, which included the sale of its non-core GES business for $535 million. This divestiture allowed PRSU, now a $772 million market cap company, to reduce its debt and refocus its business strategy.
The analyst at Craig-Hallum highlighted the company’s transition to a "higher growth, higher margin company" with a solid balance sheet, primed for investment in its growth strategy. InvestingPro analysis shows the company maintains moderate debt levels with a debt-to-equity ratio of 0.24 and a healthy current ratio of 1.09. This strategy encompasses refreshing existing assets, building new ones, and acquiring complementary businesses. For deeper insights into PRSU’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
PRSU’s management is anticipating a notable increase in revenue growth for 2025, targeting a low-double-digit percentage increase, a significant jump from the 4.6% growth seen in 2024. Two key factors behind this expected growth are the recovery of tourism in Jasper National Park following last year’s wildfires and the contributions from three recent "tuck-in" acquisitions.
The analyst also pointed out the company’s deep pipeline of mergers and acquisitions (M&A) opportunities. PRSU is well-positioned to pursue these opportunities thanks to its "cleaned-up balance sheet." The company has a history of forming multi-year relationships with owners of high-barrier-to-entry attractions and hospitality assets, which could lead to transformative acquisitions.
In terms of financing future M&A activities, PRSU is expected to primarily utilize debt, which will be subsequently paid down using cash flow from operations. This approach is projected to significantly increase EBITDA while avoiding substantial equity dilution.
Since 2014, PRSU has made substantial internal investments, totaling $460 million, which have resulted in over $74 million in annual EBITDA. Current InvestingPro data shows trailing twelve-month EBITDA of $60 million, with the company trading at an EV/EBITDA multiple of 15.92x. The analyst noted that these investments have been effectively yielding a 6x EBITDA multiple, compared to the current trailing EBITDA multiple of approximately 11x. With several internal investment opportunities on the horizon, there is potential for upward revisions to the company’s 2026 estimates and substantial long-term growth. InvestingPro subscribers have access to 12 additional key insights about PRSU, including detailed valuation metrics and growth projections.
In other recent news, Pursuit Attractions and Hospitality reported fourth quarter revenue that exceeded analyst expectations, with figures reaching $366.5 million compared to the projected $250.8 million. The company also reported an adjusted loss per share of $0.15, which was significantly better than the anticipated loss of $1.40 per share. For the full year 2024, Pursuit’s revenue increased by 4.6% to $366.5 million, driven by higher ticket sales in attractions, though partially offset by temporary closures and reduced visitation at Jasper National Park due to wildfires. Pursuit anticipates revenue growth in 2025 to be in the low-double digits compared to 2024, along with an adjusted EBITDA forecast of $98 million to $108 million, marking a substantial increase from 2024.
The company successfully completed the sale of its GES business for $535 million at the end of 2024, which has allowed it to become a pure-play attractions and hospitality company. This transaction helped eliminate high-cost debt and provided significant liquidity to support its growth strategy. Pursuit’s management expressed optimism about entering 2025 with a strong balance sheet and a focus on delivering exceptional guest experiences. The company aims to capitalize on the expected return of leisure travel to Jasper and invest in high-return growth opportunities.
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