Q3 Earnings Highs And Lows: Soho House (NYSE:SHCO) Vs The Rest Of The Travel and Vacation Providers Stocks

January 02, 2025 at 04:05 AM EST

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Wrapping up Q3 earnings, we look at the numbers and key takeaways for the travel and vacation providers stocks, including Soho House (NYSE: SHCO) and its peers.

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 13.8% on average since the latest earnings results.

Soho House (NYSE: SHCO)

Boasting fancy locations in hubs such as NYC and Miami, Soho House (NYSE: SHCO) is a global hospitality brand offering exclusive private member clubs, hotels, and restaurants.

Soho House reported revenues of $333.4 million, up 13.6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ members estimates and full-year EBITDA guidance missing analysts’ expectations significantly.

"Our third quarter results reflect the strength of our membership model. Membership revenues grew 17% year-on-year, while we achieved our highest ever quarterly Total revenues and Adjusted EBITDA. At the end of the period, we opened Soho Mews House in London, our 45th House, with great feedback from members. We have continued to see significant demand for other recent openings, including Sao Paulo, Mexico City and Portland,” said Andrew Carnie, CEO of Soho House & Co.

Soho House delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 51.4% since reporting and currently trades at $7.45.

Read our full report on Soho House here, it’s free.

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, outperforming analysts’ expectations by 8.3%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

Target Hospitality achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 1.1% since reporting. It currently trades at $9.30.

Is now the time to buy Target Hospitality? Access our full analysis of the earnings results here, it’s free.

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 estimates and a miss of analysts’ airline bookings estimates.

As expected, the stock is down 11.4% since the results and currently trades at $3.65.

Read our full analysis of Sabre’s results here.

Hilton Grand Vacations (NYSE: HGV)

Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE: HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.

Hilton Grand Vacations reported revenues of $1.31 billion, up 28.3% year on year. This result surpassed analysts’ expectations by 0.9%. Zooming out, it was a good quarter as it also logged a decent beat of analysts’ EBITDA estimates.

Hilton Grand Vacations delivered the fastest revenue growth among its peers. The stock is down 3.1% since reporting and currently trades at $38.95.

Read our full, actionable report on Hilton Grand Vacations here, it’s free.

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. This print topped analysts’ expectations by 0.5%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates and full-year EPS guidance exceeding analysts’ expectations.

The stock is up 36.1% since reporting and currently trades at $17.49.

Read our full, actionable report on American Airlines 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 Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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