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Norwegian Cruise Line Holdings Ltd NCLH

Morningstar Rating
$18.29 +0.89 (5.11%)
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Company Report

Narrow-Moat Norwegian Charts a Detailed Course to Improving Profits

With pandemic-related changes in consumer behavior around travel in the rearview mirror, economic performance of Norwegian Cruise Line Holdings is on a path to the generation of excess economic rents. As consumers returned to cruising after the 15-month sailing halt that ended in July 2021, they regained their appetite for travel, bolstered by the value proposition the holiday provides, an interest that continues to persist. With ships fully deployed at historical occupancy levels, pricing surpassed prepandemic levels in 2023 and continues to show momentum in 2024. While Norwegian could intermittently see pricing competition in periods of macroeconomic distress, we believe its attractive itineraries, tactical revenue management, and data-driven marketing will keep elevating sales across the brands. On the cost side, while higher oil prices and unfavorable foreign exchange could elevate costs at times, we expect management will focus on extracting further efficiencies as the business continues to scale. Over time, we expect both pricing and costs to normalize at low-single-digit rates.

Price vs Fair Value

NCLH is trading at a 829% premium.
Price
$17.40
Fair Value
$75.00
Uncertainty
Very High
1-Star Price
$33.60
5-Star Price
$45.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

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.

Bears

Weakness in consumer spending spurred by an economic downturn could affect discretionary spending, leading pricing to soften and lower onboard spending.

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News

Trading Information

Previous Close Price
$17.40
Day Range
$17.6418.51
52-Week Range
$12.7122.75
Bid/Ask
$18.28 / $18.30
Market Cap
$7.85 Bil
Volume/Avg
19.5 Mil / 13.9 Mil

Key Statistics

Price/Earnings (Normalized)
16.72
Price/Sales
0.84
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Norwegian Cruise Line is the world's third-largest cruise company by berths (around 66,500). It operates 32 ships across three brands—Norwegian, Oceania, and Regent Seven Seas—offering both freestyle and luxury cruising. The company redeployed its entire fleet as of May 2022. With 13 passenger vessels on order among its brands through 2036, representing 41,000 incremental berths, Norwegian is increasing capacity faster than its peers, expanding its brand globally. Norwegian sails to around 700 global destinations.
Sector
Consumer Cyclical
Industry
Travel Services
Stock Style Box
Small Growth
Total Number of Employees
35,900

Competitors

Valuation

Metric
NCLH
RCL
CCL
Price/Earnings (Normalized)
16.7217.7848.67
Price/Book Value
20.627.723.11
Price/Sales
0.843.030.92
Price/Cash Flow
5.2911.696.29
Price/Earnings
NCLH
RCL
CCL

Financial Strength

Metric
NCLH
RCL
CCL
Quick Ratio
0.130.090.23
Current Ratio
0.240.190.36
Interest Coverage
1.452.421.10
Quick Ratio
NCLH
RCL
CCL

Profitability

Metric
NCLH
RCL
CCL
Return on Assets (Normalized)
2.71%7.00%1.19%
Return on Equity (Normalized)
254.29%57.67%9.22%
Return on Invested Capital (Normalized)
9.15%12.59%5.88%
Return on Assets
NCLH
RCL
CCL
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Morningstar Rating for Stocks
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KxvgcmdJctzbf$17.0 Bil
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VIK
Ffbd$13.6 Bil
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