What Happened?

Shares of hospitality company Pursuit Attractions and Hospitality (NYSE: PRSU) fell 5.8% in the morning session after the company reported mixed third-quarter results, where a significant year-on-year revenue drop overshadowed beats on profit estimates. 

For the quarter, revenue fell by a steep 47.1% year-on-year to $241 million, continuing a multi-year trend of declining sales. However, this figure still managed to beat Wall Street's expectation of $225 million. The company also posted adjusted earnings per share of $2.65, which was $0.20 ahead of the analyst consensus. Additionally, Pursuit's full-year adjusted EBITDA guidance of $119 million at the midpoint came in above analyst estimates. Despite the beats, the sharp decline in the top line likely concerned investors, signaling ongoing demand challenges for the tourism and hospitality operator.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Pursuit Attractions and Hospitality? Access our full analysis report here.

What Is The Market Telling Us

Pursuit Attractions and Hospitality’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 30 days ago when the stock dropped 5.3% on the news that a confluence of negative economic data pointed to a weak economy. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations rose, while their outlook on the labor market deteriorated. Consumers expressed greater concern about potential job losses and expected lower earnings growth, factors that directly impact discretionary spending. Adding to the unease, Chief Economist at Moody’s Analytics, Mark Zandi, warned that 22 states demonstrated clear signs of a recession, placing the broader U.S. economy in a precarious position. The U.S. government shutdown further dampened sentiment, threatening to weigh on incomes and purchasing power.

Pursuit Attractions and Hospitality is down 20.8% since the beginning of the year, and at $32.96 per share, it is trading 27.6% below its 52-week high of $45.51 from November 2024. Investors who bought $1,000 worth of Pursuit Attractions and Hospitality’s shares 5 years ago would now be looking at an investment worth $1,753.

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