On Wednesday, Stifel maintained its Buy rating and $37.00 price target for Viking Holdings (NYSE:VIK), following the company's financial performance that surpassed expectations. Viking Holdings reported gross and net revenue of $718 million and $495 million, respectively, which exceeded Stifel's projections of $706 million and $468 million, as well as the consensus estimates of $716 million and $479 million.
Operating losses were reported at $70 million, which was significantly better than Stifel's anticipated $131 million loss and the consensus estimate of an $88 million loss. This figure also fell within the range of Viking's prior revenue and operating income pre-announcement, which estimated gross revenues between $710 million and $720 million and operating losses between $90 million and $70 million.
Adjusted EBITDA was reported at a loss of $4 million, outperforming both Stifel's model, which predicted a $63 million loss, and the consensus estimate of a $25 million loss. The company's total cruise operating expenses saw an approximate 7% year-over-year increase. Fuel expenses amounted to $42 million, while net interest expenses totaled $99 million.
Earnings per share (EPS) were reported at a loss of $1.21, which was more than double the forecasted loss of $0.53 by Stifel and higher than the consensus estimate of a $0.44 loss. Viking Holdings achieved an occupancy rate of around 94% for the quarter, with net yields of $508, marking a 3% year-over-year increase on a roughly 14% capacity increase.
The report also detailed the revenue breakdown between Viking's segments, with river segment revenues at $165 million and ocean segment revenues at $448 million, reflecting typical first quarter seasonality. The company concluded the first quarter of 2024 with a net leverage ratio of 3.4 times, a reduction from the 4Q23 levels, and reported deferred revenues of $4.1 billion.
In other recent news, Viking Holdings has been the subject of several analyst reports. Wells Fargo (NYSE:WFC) initiated coverage with an Overweight rating, highlighting Viking's unique strategy of focusing on a luxury experience tailored to a specific clientele. JPMorgan (NYSE:JPM) also initiated coverage with an Overweight rating, citing the company's potential for significant market share growth in the global vacation market. The firm also projected a 15% compound annual growth rate in revenue through 2026 for Viking.
Redburn-Atlantic initiated coverage on Viking with a Neutral rating, recognizing the company's significant growth and potential, while also noting its superior and defendable returns profile. UBS initiated coverage with a Buy rating, acknowledging Viking's robust financial health and high returns on invested capital. The firm also highlighted Viking's unique market position, focusing on the luxury consumer segment.
Morgan Stanley (NYSE:MS) initiated coverage with an Equalweight rating, underscoring Viking's significant growth over the past 25 years. The firm also highlighted Viking's strategy of targeting the premium and luxury market, specifically the 55+ US consumer segment, as a key driver of its success.
InvestingPro Insights
In light of Viking Holdings' recent financial performance, InvestingPro data provides additional context for investors considering the company's stock. With a market capitalization of $13.2 billion, Viking Holdings is a significant player in the Hotels, Restaurants & Leisure industry, as noted by one of the InvestingPro Tips. Despite facing challenges such as not being profitable over the last twelve months and short-term obligations exceeding liquid assets, analysts predict the company will turn a profit this year. Additionally, the company's revenue growth is impressive, with a 48.32% increase over the last twelve months as of Q4 2023, and a gross profit margin of 40.82%.
Investors should note that the stock is trading near its 52-week high, with the price at 98.65% of this peak, and has shown a strong return over the last three months. These figures could suggest a robust market confidence in Viking Holdings' recovery and future profitability. Moreover, the company's solid performance is also reflected in the 17.24% year-to-date price total return. For those interested in further analysis and additional InvestingPro Tips, including the company's RSI indicating an overbought territory and its non-dividend status, you can explore more on Investing.com's Pro platform. There are 9 additional InvestingPro Tips available for Viking Holdings, offering deeper insights for informed investment decisions. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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