Royal Caribbean Cruises (RCL) Drops 1.9%

Now trading at a price of $101.2, Royal Caribbean Cruises has moved -1.9% so far today.

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. Based in Miami, FL, the mid-cap Consumer Discretionary company has 102,400 full time employees. Royal Caribbean Cruises has not offered a dividend during the last year.

The Company's Revenues Are Declining:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $10,951 $2,209 $1,532 $8,841
Gross Margins 44.6% -25.2% -73.4% 25.2%
Operating Margins 19.0% -137.4% -247.3% -8.6%
Net Margins 17.16% -262.47% -343.34% -24.39%
Net Income (MM) $1,879 -$5,797 -$5,260 -$2,156
Net Interest Expense (MM) -$382 -$823 -$1,275 -$1,328
Depreciation & Amort. (MM) -$1,246 -$1,279 -$1,293 -$1,407
Earnings Per Share $8.95 -$27.05 -$20.89 -$4.02
EPS Growth n/a -402.23% 22.77% 80.76%
Diluted Shares (MM) 210 214 252 256
Free Cash Flow (MM) $692 -$5,697 -$4,108 -$2,228
Capital Expenditures (MM) -$3,025 -$1,965 -$2,230 -$2,710
Net Current Assets (MM) -$16,424 -$19,393 -$23,573 -$27,703
Current Ratio 0.15 0.95 0.49 0.37
Long Term Debt (MM) $8,414 $17,958 $18,847 $21,303
Net Debt / EBITDA 2.76 -5.57 -13.18 11.08

Royal Caribbean Cruises has declining revenues and a flat capital expenditure trend, slimmer gross margins than its peers, and consistently negative margins with a negative growth trend. Additional warning signs include declining EPS growth, negative and highly variable cash flows, and a highly leveraged balance sheet.

Royal Caribbean Cruises does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $6.96, the company has a forward P/E ratio of 12.4. In comparison, the average P/E ratio for the Consumer Discretionary sector is 22.33. Furthermore, Royal Caribbean Cruises is likely overvalued compared to the book value of its equity, since its P/B ratio of 9.08 is higher than the sector average of 3.12.

Royal Caribbean Cruises Has an Average Rating of Buy:

The 13 analysts following Royal Caribbean Cruises have set target prices ranging from $70.0 to $120.0 per share, for an average of $94.88 with a buy rating. As of April 2023, the company is trading -9.1% away from its average target price, indicating that there is an analyst consensus of little upside potential.

Royal Caribbean Cruises has an above average percentage of its shares sold short because 12.0% of the company's shares are sold short. Institutions own 74.8% of the company's shares, and the insider ownership rate stands at 13.21%, suggesting a large amount of insider shareholders. The largest shareholder is Capital Research Global Investors, whose 11% stake in the company is worth $2,906,544,298.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.