Norwegian Cruise Line has gained more than 15% in price over the past three months, but is still down more than 30% on the year. It could be a good idea to sell the stock before it goes even lower. Please read on.
shutterstock.com - StockNews Norwegian Cruise Line is a global cruise company. itineraries range from 3 days to 180 days calling on various locations across the globe
The cruise industry was badly affected by the coronaviruses. Over the last few months it has made a comeback.
Over the past three months, NCLH's stock has gained 16.8% while it has declined 34.7% year-to-date and 50.3% over the past year to close the last trading session at $13.55. The stock hit a high of $29.45 on November 5, 2021.
The cruise ship industry has been affected by rising interest rates. Consumers are not spending as much due to high rates. Several cruise shipping companies have had to take huge debts to keep their operations going because of the rising interest rates.
The sale of 86,225 shares of NCLH by Howard Sherman was disclosed in a Form 4 with the SEC.
The company has a current cumulative booked position that is below that of the previous year. The company's total debt of $13.20 billion was much higher than its cash and cash equivalents and undrawn commitment.
The company is expecting a net loss in the current quarter.
The consensus revenue and earnings estimates were not surpassed by NCLH. Revenue missed estimates by 4.8% while its earnings came in below estimates. In each of the last four quarters, it has failed to beat Street estimates.
There are some things that could affect the performance of NCLH.
There are mixed financials.
The total revenue for the second quarter was more than one billion dollars. The total cruise operating expense increased by more than 300 percent.
The company's operating loss narrowed over the course of the year. It had a net loss of $509.32 million last year. Its loss per share was reduced by 37.1% from a year ago.
Some analyst estimates are mixed.
NCLH's earnings per share are expected to remain negative in fiscal 2022, but the company's earnings per share are expected to increase in fiscal23. Its revenue is expected to increase to $4.75 billion and $8.07 billion over the course of the next two years.
The valuation is stretched.
NCLHs forward EV/S is 264.1% higher than the industry average. Its forward P/S is higher than the industry average. The stock has a forward P/B that is more than double the industry average.
Lower than industry.
The net income margin is negative for NCLH. The trailing-12-month levered FCF margin is negative. The stock's asset turnover ratio is much lower than the industry average.
POWR ratings reflect bad news.
An F rating equates to a Strong Sell in our POWR ratings system. POWR Ratings are calculated by considering 118 different factors.
Each stock is evaluated based on eight different categories. It has a D grade for value.
It has a D grade for quality. The F grade for stability is justified by its 2.40beta.
The Travel - Cruises industry has a rating of F-rated. You can access NCLH's ratings for growth, momentum, and sentiment by clicking here.
The bottom line.
NCLH is currently trading below its 10-day and 200 day moving averages. Cruise operators are expected to be negatively affected by the Fed. NCLH is expected to post a net loss due to the uncertain macroeconomic environment and the effects of the ongoing Russia–Ukraine conflict.
It could be a good idea to avoid the stock at this time.
NCLH shares were not traded before the market opened. NCLH has declined since the beginning of the year, while the S&P 500 has risen.
Dipanjan was interested in the stock market as a child. He obtained a masters degree in finance and accounting. Dipanjan is interested in reading and analyzing emerging trends in financial markets.
There is more.
Sell this cruise ship stock before it goes even lower.
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