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Financial Strength
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Norwegian Cruise Line (NCLH) posted its fourth-quarter results revealing a quarterly loss of $0.18 per share.
Combining Norwegian Cruise Line Holdings' Debt And Its 55% Return On Equity
In terms of the trailing-12-month EBITDA margin, RCL’s 31.29% is 183.3% higher than the 11.04% industry average. Its 44.70% trailing-12-month Return on Common Equity is 297.8% higher than the 11.24% industry average. On the other hand, the stock’s 0.40x trailing-12-month asset turnover ratio is 59.7% lower than the 1x industry average. In terms of the trailing-12-month asset turnover ratio, NCLH’s 0.45x is 55.1% lower than the 1x industry average. Its 36.04% trailing-12-month gross profit margin is marginally lower than the 36.18% industry average. Likewise, the stock’s 1.94% trailing-12-month net income margin is 58.2% lower than the 4.65% industry average.
Norwegian Cruise Line Holdings Ltd. (NCLH)
Norwegian has lagged behind its competitors, although others are still posting losses as the industry battles higher fuel prices and interest rates. Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. It has an overall rating of C, which translates to a Neutral in our proprietary rating system.
Norwegian Cruise Line Holdings Ltd. (NCLH) Is a Trending Stock: Facts to Know Before Betting on It - Yahoo Finance
Norwegian Cruise Line Holdings Ltd. (NCLH) Is a Trending Stock: Facts to Know Before Betting on It.
Posted: Thu, 07 Mar 2024 08:00:00 GMT [source]
Here's why Goldman Sachs just gave Carnival and Royal Caribbean stocks buy ratings
That said, the longer-term outlook for the company remains mixed, in our view. Booking trends have also been mixed, with reservations for the second half of 2021 apparently remaining below historical levels, although early trends for 2022 look strong, per the company. Norwegian has spent the better part of the last year raising funds via debt and equity issuances, with its debt load standing at about $11.8 billion at the end of Q4, up from about $6.8 billion a year ago. The higher interest costs are likely to weigh on the company’s profitability going forward. Longer-term profitability also remains a concern, given potentially higher interest expenses. The company’s total debt rose to about $11.8 billion at the end of 2020, up from around $6.8 billion at the end of 2019.
Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking this free report on analyst forecasts for the company. Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt. NCLH, -1.48% jumped 6.6% in premarket trading Tuesday, after the cruise operator reported a wider-than-expected fourth-quarter loss, but expects a surpris...
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Moreover, the company said that it would begin cruising to Alaska from early August following the passage of the U.S. Alaska Tourism Restoration Act, which temporarily enables cruise ships to sail to Alaska, bypassing a legal requirement to make a stop at ports in Canada, which has banned cruses until 2022. Cruise companies had previously canceled their trips to Alaska, which is a popular summer cruising destination. Separately, the CDC also recently issued new guidelines easing mask-wearing requirements and social-distancing guidelines for fully vaccinated passengers on cruises.
Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.55 in profit. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits.
However the stock is trading higher thanks to upbeat first-quarter guidance and a full-yea... As Norwegian is smaller than its North American cruise peers, it has the ability to deploy its assets nimbly as cruising demand rises, allowing for strategic pricing tactics. CEO Frank Del Rio said the company's first 2023 quarter "will be the highest cost quarter," but added that the second half will be better. Norwegian is projecting losses of 45 cents per share in the first quarter, 10 cents higher than Wall Street had anticipated.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer.
In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. For the fiscal fourth quarter that ended on December 31, 2023, RCL’s total revenues increased by 27.9% year-over-year to $3.33 billion, while its operating income rose considerably to $570 million.
Royal Caribbean saw its stock jump after posting narrower than expected fourth quarter losses and bookings earlier in February. Morgan Stanley had upgraded the rival company in January, naming it the "superior cruise operator" coming out of the pandemic. For the quarter ending May 31, 2024, CCL’s revenue is expected to increase 15.2% year-over-year to $5.66 billion. Over the past year, the stock has gained 44.8% to close the last trading session at $14.12.
#1 (Strong Buy) stocks have produced an unmatched +25.41% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day. Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time. One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification.
Try the Trefis machine learning engine above to see for yourself how Norwegian Cruise Line stock is likely to behave after any specific gain or loss over a period. Norwegian Cruise Line (NCLH) rises on 4Q revenue and 1Q upbeat guidance. NCLH's incredibly strong results highlight the strength in its brand and the cruise industry, notes Ivan Feinseth. Gain deeper insights into company revenues with a detailed analysis of revenue sources. Explore the updated Options feature, providing in-depth data, and a 3D viewing option. Norwegian is also projecting full-year earnings per share of 70 cents in 2023, well below expectations of $1.04.
Although the new guidelines don’t specifically refer to the cruising industry, they should give potential cruise customers some confidence that things are returning to normal. Moreover, Pfizer’s PFE Covid-19 vaccine received approval for use in children aged 12 to 15 in the U.S. This could also prove positive for the cruising business, as there could be some revival in demand from families. Norwegian Cruise Line shares fell more than 10% on Tuesday after the company posted wider losses than expected and offered soft guidance for the year, despite persistent travel demand. RCL shares were trading at $128.42 per share on Thursday afternoon, up $0.45 (+0.35%).
That said, the stock still remains down by about 50% from its pre-Covid highs, making the risk to reward proposition relatively attractive for investors. The Goldman Sachs Group assumed coverage on shares of Norwegian Cruise Line in a research note on Wednesday, March 13th. They issued a "neutral" rating and a $19.00 price target for the company. Wells Fargo & Company reissued an "equal weight" rating and issued a $18.00 price target on shares of Norwegian Cruise Line in a research note on Friday, January 5th. Susquehanna increased their price target on shares of Norwegian Cruise Line from $20.00 to $21.00 and gave the company a "neutral" rating in a research note on Wednesday, February 28th.
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