Lindblad Expeditions (LIND)

Cruise and exploration company Lindblad Expeditions (NASDAQ:LIND) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 16.6% year on year to $240.2 million. The company’s full-year revenue guidance of $752.5 million at the midpoint came in 1.1% above analysts’ estimates. Its GAAP loss of $0 per share was significantly below analysts’ consensus estimates.

Company Overview

Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ:LIND) offers cruising experiences to remote destinations in partnership with National Geographic.

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 company's primary competitors include Hurtigruten Group (OTCMKTS:HRGUF), Hapag-Lloyd Cruises (owned by TUI Group XETRA:TUI1), Silversea Cruises (owned by Royal Caribbean Group NYSE:RCL), and private companies Ponant and Quark Expeditions (owned by Travelopia).

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Lindblad Expeditions grew its sales at an incredible 36.1% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

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. Lindblad Expeditions’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 14.5% over the last two years was well below its five-year trend.

This quarter, Lindblad Expeditions reported year-on-year revenue growth of 16.6%, and its $240.2 million of revenue exceeded Wall Street’s estimates by 4.6%.

Looking ahead, sell-side analysts expect revenue to grow 7.9% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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.

Lindblad Expeditions’s operating margin has risen over the last 12 months and averaged 4.8% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for a consumer discretionary business.

In Q3, Lindblad Expeditions generated an operating margin profit margin of 15%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although Lindblad Expeditions’s full-year earnings are still negative, it reduced its losses and improved its EPS by 14.3% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.

In Q3, Lindblad Expeditions reported EPS of $0, down from $0.36 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Lindblad Expeditions’s full-year EPS of negative $0.66 will flip to positive $0.03.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Lindblad Expeditions has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 7.5%, subpar for a consumer discretionary business.

Lindblad Expeditions’s free cash flow clocked in at $11.91 million in Q3, equivalent to a 5% margin. The company’s cash profitability regressed as it was 4 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.

Over the next year, analysts’ consensus estimates show they’re expecting Lindblad Expeditions’s free cash flow margin of 7.1% for the last 12 months to remain the same.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Lindblad Expeditions’s five-year average ROIC was negative 5.2%, meaning management lost money while trying to expand the business. Its returns were among the worst in the consumer discretionary sector.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Lindblad Expeditions’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

Lindblad Expeditions reported $290.1 million of cash and $664.3 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $125.5 million of EBITDA over the last 12 months, we view Lindblad Expeditions’s 3.0× net-debt-to-EBITDA ratio as safe. We also see its $23.59 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing Lindblad Expeditions beat analysts’ revenue and EBITDA expectations this quarter. Looking ahead, full-year revenue guidance was raised. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5% to $12.80 immediately following the results.

Updated: December 3, 2025 at 10:14 PM EST

Before investing in or passing on Lindblad Expeditions, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

Lindblad Expeditions falls short of our quality standards. For starters, its revenue growth was mediocre over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its projected EPS for the next year implies the company’s fundamentals will improve, the downside is its Forecasted free cash flow margin for next year suggests the company will fail to improve its cash conversion. On top of that, its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Lindblad Expeditions’s P/E ratio based on the next 12 months is 100.1x. This valuation multiple is fair, but we don’t have much confidence in the company. There are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $16.33 on the company (compared to the current share price of $12.03).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.