Up to 23% last month, is the Norwegian cruise line still a buy?

Shares of Norwegian Cruise Line (NCLH) rose 22.6% last month as the company estimates it will recover from its epidemic losses and become profitable by the end of 2022. However, given NCLH’s current performance and premium valuation of its stock, is it now worth the stock bet? Let’s talk.



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Norwegian Cruise Line Holdings Ltd. (NCLH) Inside Miami, Fla., A global cruise corporation that operates Norwegian cruise lines, Oceania cruises and Regent Seven Seas cruises. These brands deliver cruises to more than 490 destinations worldwide, with a combined fleet of 28 ships and about 60,000 berths. NCLH’s share price rose 22.6% last month.

However, the stock closed at. 21.45 in yesterday’s trading session, down 27.1% from last year and 19.2% in the last six months. In addition, it is currently trading 36.8% below the 52-week high of $ 33.95, which it hit on June 09, 2021.

NCLH’s losses have expanded significantly since its last reported quarter. In addition, as its fleet is not yet fully operational, the company is expected to make a loss in the next quarter. As a result, the near-term prospects for NCLH seem bleak.

Here’s how to shape NCLH performance in the near term:

Extended assessment

In terms of forward price / selling, the stock is currently trading at 1.57x, which is 668.1% higher than the 0.94x industry average. Also, its 3.49x forward EV / sales is 1.13x 209.4% higher than the industry average. Furthermore, NCLH’s 4.16x forward price / book 2.53x is 64.5% higher than the industry average.

Insufficient financial

NCLH’s total revenue for the fourth quarter ended December 31, 2021 increased significantly to $ 487.44 million. Its operating loss increased 25.6% to আগের 686.87 million from its previous year’s value. The company’s net loss rose 112.8% to $ 1.57 billion in the year-ago quarter, from $ 4.01 per share during the period. Also, its cash and cash equivalents decreased by 54.4% to $ 1.51 billion for the year ended December 31, 2021.

Poor profitability

NCLH’s 0.03% trailing-12-month asset turnover ratio is 1.06%, 96.7% lower than the industry average. Also, the 12 months ROA behind it, EBITDA margin, And the ROC is negative at 24.1%, 276.9% and 9.9%, respectively. In addition, its cash from operations stood at শিল্প 2.47 billion, negative compared to the industry average of $ 159.46 million.

POWR ratings reflect uncertainty

NCLH has an overall F rating, which is equivalent to a strong sale under our ownership. POWR rating Method. POWR ratings are calculated based on 118 individual factors, each factor being weighed to an optimal degree.

Our proprietary rating system evaluates each stock based on eight distinct categories. NCLH has an F grade for stability and value. The 2.59 beta of the stock is consistent with its stability grade. In addition, the company is consistent with higher rating standards than industry.

F-rated among four stocks Travel – Cruise Industry, NCLH Ranking # 2.

Beyond what I said above, one can see the NCLH rating for quality, speed, growth and feel Here.

The last row

Despite being one of the leading global cruise companies, NCLH’s near-term prospects look bleak as the company recovers from epidemic-led disruptions and has not yet resumed operations at full capacity. In addition, analysts expect its EPS to decline at an annual rate of 24.1% over the next five years. So, given its high valuation, we believe that the stock should be avoided now.


NCLH shares rose $ 0.06 (+ 0.28%) in premarket trading on Thursday. Year-to-date, NCLH rose 4.10%, compared to a -6.47% increase in the benchmark S&P 500 index over the same period.


About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college he did a major in finance and is currently pursuing a CFA program and is a second tier candidate.

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