The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how travel and vacation providers stocks fared in Q3, starting with Target Hospitality (NASDAQ: TH).
Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.
The 17 travel and vacation providers stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 0.9% below.
Luckily, travel and vacation providers stocks have performed well with share prices up 15.2% on average since the latest earnings results.
Best Q3: Target Hospitality (NASDAQ: TH)
Building mini-communities at places such as oil drilling sites, Target Hospitality (NASDAQ: TH) is a provider of specialty workforce lodging accommodations and services.
Target Hospitality reported revenues of $95.19 million, down 34.8% year on year. This print exceeded analysts’ expectations by 8.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
"The third quarter results were supported by strong business fundamentals and our proven operational flexibility. These elements enable Target to quickly align with customer demand, while consistently achieving our financial goals," stated Brad Archer, President and Chief Executive Officer.
Target Hospitality pulled off the biggest analyst estimates beat and highest full-year guidance raise, but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 3.3% since reporting and currently trades at $9.50.
American Airlines (NASDAQ: AAL)
One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ: AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
American Airlines reported revenues of $13.65 billion, up 1.2% year on year, outperforming analysts’ expectations by 0.5%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and full-year EPS guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 34.2% since reporting. It currently trades at $17.24.
Is now the time to buy American Airlines? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Sabre (NASDAQ: SABR)
Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.
Sabre reported revenues of $764.7 million, up 3.3% year on year, falling short of analysts’ expectations by 1.4%. It was a slower quarter as it posted a significant miss of analysts’ EPS and airline bookings estimates.
As expected, the stock is down 7.7% since the results and currently trades at $3.80.
Read our full analysis of Sabre’s results here.
Delta Air Lines (NYSE: DAL)
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE: DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Delta Air Lines reported revenues of $15.68 billion, up 7.7% year on year. This result beat analysts’ expectations by 2.5%. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ EPS estimates but a miss of analysts’ EBITDA estimates.
The stock is up 20.2% since reporting and currently trades at $61.30.
Read our full, actionable report on Delta Air Lines here, it’s free.
Wyndham (NYSE: WH)
Established in 1981, Wyndham (NYSE: WH) is a global hotel franchising company with over 9,000 hotels across nearly 95 countries on six continents.
Wyndham reported revenues of $396 million, down 1.5% year on year. This print came in 3% below analysts' expectations. Overall, it was a slower quarter as it also produced a miss of analysts’ adjusted operating income estimates.
Wyndham had the weakest performance against analyst estimates among its peers. The stock is up 24.8% since reporting and currently trades at $101.53.
Read our full, actionable report on Wyndham here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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