Are Investors Undervaluing Royal Caribbean Cruises (RCL) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Royal Caribbean Cruises (RCL). RCL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.17 right now. For comparison, its industry sports an average P/E of 18.27. Over the last 12 months, RCL's Forward P/E has been as high as 20.12 and as low as 10.16, with a median of 14.08.

Investors will also notice that RCL has a PEG ratio of 0.46. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RCL's industry currently sports an average PEG of 0.95. Within the past year, RCL's PEG has been as high as 0.46 and as low as 0.43, with a median of 0.44.

Finally, we should also recognize that RCL has a P/CF ratio of 10.58. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. RCL's current P/CF looks attractive when compared to its industry's average P/CF of 20.98. RCL's P/CF has been as high as 48.99 and as low as -32.27, with a median of 14.75, all within the past year.

These are only a few of the key metrics included in Royal Caribbean Cruises's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RCL looks like an impressive value stock at the moment.

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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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