It's been a great afternoon session for Carnival investors, who saw their shares rise 3.3% to a price of $29.52 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Carnival Is Not a Value Stock:
Carnival Corporation & plc, a cruise company, provides leisure travel services in North America, Australia, Europe, and internationally. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Carnival has a trailing 12 month P/E ratio of 15.5 and a P/B ratio of 3.87.
Carnival has moved 87.0% over the last year compared to 16.7% for the S&P 500 — a difference of 70.3%. Carnival has a 52 week high of $29.79 and a 52 week low of $13.65.
Summary of the Company's Finances:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $20,825 | $5,595 | $1,908 | $12,168 | $21,593 | $25,021 |
| Operating Margins | 16% | -158% | -372% | -36% | 9% | 14% |
| Net Margins | 14% | -183% | -498% | -50% | 0% | 8% |
| Net Income (M) | $2,990 | -$10,236 | -$9,501 | -$6,093 | -$74 | $1,916 |
| Net Interest Expense (M) | -$206 | -$895 | -$1,601 | -$1,609 | -$2,066 | -$1,755 |
| Depreciation & Amort. (M) | $2,160 | $2,241 | $2,233 | $2,275 | $2,370 | $2,557 |
| Diluted Shares (M) | 719 | 710 | 932,669 | 1,171 | 1,300 | 1,306 |
| Earnings Per Share | $4.16 | -$14.41 | -$0.01 | -$5.2 | -$0.06 | $1.47 |
| EPS Growth | n/a | -446.39% | 99.93% | -51900.0% | 98.85% | 2550.0% |
| Avg. Price | $46.41 | $18.52 | $21.29 | $15.79 | $16.86 | $29.53 |
| P/E Ratio | 11.16 | -1.29 | -2129.0 | -3.04 | -281.0 | 20.09 |
| CAPEX (M) | $5,429 | $3,620 | $3,607 | $4,940 | $3,284 | $4,626 |
| EV / EBITDA | 8.11 | -4.15 | -4093.5 | -23.2 | 11.57 | 10.58 |
| Total Debt (M) | $11,271 | $23,872 | $30,436 | $34,346 | $30,572 | $27,474 |
| Net Debt / EBITDA | 1.98 | -2.17 | -4.43 | -14.41 | 6.51 | 4.28 |
| Current Ratio | 1.29 | 6.06 | 5.26 | 3.13 | 2.52 | 2.2 |
Carnival has weak operating margins with a stable trend, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company benefits from an excellent current ratio of 2.2 and growing revenues and a flat capital expenditure trend.
