Experiential tourism company Pursuit Attractions and Hospitality (NYSE: PRSU) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 86.3% year on year to $37.58 million. Its non-GAAP loss of $0.96 per share was 31.5% below analysts’ consensus estimates.

Is now the time to buy Pursuit? Find out by accessing our full research report, it’s free.

Company Overview

With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE: PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Pursuit’s demand was weak over the last five years as its sales fell at a 37% annual rate. This wasn’t a great result and suggests it’s a lower quality business.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Pursuit’s recent performance shows its demand remained suppressed as its revenue has declined by 67.2% annually over the last two years.

This quarter, Pursuit missed Wall Street’s estimates and reported a rather uninspiring 86.3% year-on-year revenue decline, generating $37.58 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 214% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will fuel better top-line performance.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Pursuit’s operating margin has risen over the last 12 months and averaged 16.7% over the last two years. On top of that, its profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.

This quarter, Pursuit generated an operating profit margin of 48.2%, up 53 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Pursuit, its EPS and revenue declined by 14.1% and 37% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. Consumer Discretionary companies are particularly exposed to this, and if the tide turns unexpectedly, Pursuit’s low margin of safety could leave its stock price susceptible to large downswings.

In Q1, Pursuit reported EPS at negative $0.96, up from negative $1.13 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Pursuit’s Q1 Results

It was encouraging to see Pursuit’s full-year EBITDA guidance beat analysts’ expectations. On the other hand, its EPS missed significantly and its revenue fell short of Wall Street’s estimates. Overall, this was a softer quarter. Still, the stock traded up 1.2% to $30.02 immediately following the results.

Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.