Norwegian Cruise Line (NCLH) AI Stock Analysis

• Market Cap: $7.64B
• Dividend Yield: N/A
• Average Volume (3M): 15.50M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.68
• Revenue Growth: 10.87%
• EPS Growth: 433.82%
• Country: US
• Employees: 41,700
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Travel Services
• EPS (TTM): 1.77
• Shares Outstanding: 443,302,920
• 10 Day Avg. Volume: 15,109,269
• 30 Day Avg. Volume: 15,498,195
• PEG Ratio: 0.02
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.95
• Price to Cash Flow (P/CF): 5.60
• P/FCF Ratio: 14.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $26.41
• Price Target Upside: 53.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

Norwegian Cruise Line demonstrates a strong recovery post-pandemic with improved financial performance and effective cash flow management. However, high leverage remains a concern. Technical indicators show a bearish trend, though valuation metrics suggest the stock is undervalued. Positive earnings call sentiment and strategic corporate events further bolster the outlook, leading to a moderate overall score.

Positive Factors

Consumer Interest

Management observed zero detectable change in demand behavior despite macroeconomic challenges, indicating stability in consumer interest.

Financial Performance

NCLH reported 4Q24 EPS/EBITDA that beat forecasts, indicating strong financial performance.

Target Demographic

NCLH targets a high-income demographic, which is less sensitive to economic fluctuations, providing a buffer against potential consumer softness.

Negative Factors

Leverage

NCLH has the highest leverage among publicly traded cruise companies, with significant debt maturities approaching.

Share Performance

Concerns around the US consumer have clearly weighed on the shares, with NCLH shares down significantly year-to-date.

Tax Exemption Risk

The prospect of losing tax-exempt status is a concern for the cruise industry and is viewed as a potential risk.

Norwegian Cruise Line Business Overview & Revenue Model

Company Description

Norwegian Cruise Line Holdings Ltd., together with its subsidiaries, operates as a cruise company in North America, Europe, the Asia-Pacific, and internationally. The company operates the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. It offers itineraries ranging from three days to a 180-days calling on various locations, including destinations in Scandinavia, Russia, the Mediterranean, the Greek Isles, Alaska, Canada and New England, Hawaii, Asia, Tahiti and the South Pacific, Australia and New Zealand, Africa, India, South America, the Panama Canal, and the Caribbean. As of December 31, 2021, the company had 28 ships with approximately 59,150 berths. It distributes its products through retail/travel advisor and onboard cruise sales channels, as well as meetings, incentives, and charters. Norwegian Cruise Line Holdings Ltd. was founded in 1966 and is based in Miami, Florida.

How the Company Makes Money

Norwegian Cruise Line Holdings Ltd. generates revenue primarily through the sale of cruise tickets and onboard services. Ticket sales account for the majority of the company's income, as passengers pay for stateroom accommodations, dining, and entertainment while on board. Additionally, NCLH earns significant revenue from onboard offerings such as specialty dining, beverage packages, shore excursions, spa services, and retail sales. The company also benefits from partnerships with travel agencies and tour operators who help market and sell their cruise vacations. Ancillary revenue streams include casino operations, internet services, and photography sales, contributing to the overall financial performance of the company.

Norwegian Cruise Line Financial Statement Overview

Summary

Norwegian Cruise Line has shown a strong recovery with revenue growth and positive net income. However, the high debt levels and low equity ratio present financial risks.

Income Statement

Norwegian Cruise Line has shown significant recovery in recent years, with total revenue growing from $4.8 billion in 2022 to $9.5 billion in 2024. The gross profit margin improved to 40% in 2024, indicating better cost management. Net income turned positive in 2024 with a net profit margin of 9.6%, a notable improvement from the negative figures in previous years. However, EBIT and EBITDA margins, at 15.5% and 9.7% respectively, show room for further operational efficiency improvements.

Balance Sheet

The company maintains a high debt-to-equity ratio, reflected by $13.1 billion in total debt against $1.4 billion in stockholders' equity in 2024, indicating high leverage. Although stockholders' equity has improved from previous years, the equity ratio remains low at 7.1%, indicating that most assets are financed through debt. This poses a risk given potential interest rate fluctuations and economic uncertainty.

Cash Flow

Norwegian Cruise Line has shown strong cash flow management, with operating cash flow increasing to $2.0 billion in 2024. The free cash flow turned positive in 2024 at $839 million, a significant improvement from negative figures in 2023. The operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings. However, the free cash flow to net income ratio suggests reliance on operating cash flow rather than net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.48B	8.55B	4.84B	647.99M	1.28B
	Gross Profit
3.79B	3.08B	576.67M	-960.05M	-413.15M
	EBIT
1.47B	930.91M	-1.55B	-2.55B	-3.48B
	EBITDA
2.49B	1.75B	-729.94M	-1.79B	-2.80B
	Net Income Common Stockholders
910.26M	166.18M	-2.27B	-4.51B	-4.01B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
190.76M	402.42M	946.99M	1.75B	3.30B
	Total Assets
19.97B	19.49B	18.56B	18.73B	18.40B
	Total Debt
13.10B	14.73B	13.62B	12.45B	11.81B
	Net Debt
12.91B	14.32B	12.67B	10.94B	8.51B
	Total Liabilities
18.54B	19.19B	18.49B	16.30B	14.05B
	Stockholders Equity
1.43B	300.81M	68.59M	2.43B	4.35B
Cash Flow		Free Cash Flow
838.87M	-744.65M	-1.57B	-3.22B	-3.50B
	Operating Cash Flow
2.05B	2.01B	210.02M	-2.47B	-2.56B
	Investing Cash Flow
-1.23B	-2.90B	-1.76B	-1.00B	-975.36M
	Financing Cash Flow
-1.03B	346.86M	986.22M	1.68B	6.58B

Norwegian Cruise Line Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 17.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NCLH, the sentiment is Neutral. The current price of 17.23 is above the 20-day moving average (MA) of 17.01, below the 50-day MA of 19.95, and below the 200-day MA of 22.10, indicating a neutral trend. The MACD of -0.90 indicates Negative momentum. The RSI at 45.27 is Neutral, neither overbought nor oversold. The STOCH value of 54.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NCLH.

Norwegian Cruise Line Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCL	76 Outperform	$57.56B	19.32	46.85%	0.80%	18.60%	65.95%
DIS	73 Outperform	$153.46B	27.56	5.54%	1.05%	3.97%	89.53%
H	67 Neutral	$10.41B	8.62	36.45%	0.53%	-6.41%	511.40%
CCL	66 Neutral	$24.17B	12.39	25.87%	―	12.66%	403.58%
NCLH	64 Neutral	$7.64B	9.72	105.46%	―	10.87%	433.82%
Sector *	60 Neutral	$6.86B	11.61	3.16%	4.15%	2.41%	-21.45%
LIND	47 Neutral	$485.27M	―	21.42%	―	13.20%	28.95%

Norwegian Cruise Line Corporate Events

Norwegian Cruise Line Appoints John Chidsey to Board

On February 5, 2025, Norwegian Cruise Line Holdings Ltd. appointed Mr. John Chidsey as a member of its Board of Directors. Mr. Chidsey, recognized as an independent director, will also serve as Chairperson of the Nominating and Governance Committee and as a member of the Audit Committee. His compensation package includes an annual cash retainer, committee-specific retainers, and restricted share units, with the option to receive part of his compensation as RSUs starting in 2026. This appointment reflects the company’s efforts to strengthen its governance and oversight, potentially impacting its strategic direction and offering reassurance to stakeholders about its commitment to robust corporate governance practices.