Norwegian Cruise Line Holdings Ltd. NCLH is scheduled to report third-quarter 2024 results on Oct. 31, before the opening bell. In the last reported quarter, the company registered an earnings surprise of 17.7%.
NCLH’s Estimates Trending Upward
The Zacks Consensus Estimate for third-quarter adjusted earnings is pegged at 94 cents per share, indicating a year-over-year jump of 23.7%. In the past 30 days, earnings estimates for the current quarter have been revised upward by 1.1%. For revenues, the consensus mark is pegged at $2.76 billion, suggesting an 8.8% year-over-year gain.
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What the Zacks Model Unveils
Our proven model predicts an earnings beat for Norwegian Cruise this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Norwegian Cruise has an Earnings ESP of +2.19%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise
Norwegian Cruise Line Holdings Ltd. price-eps-surprise | Norwegian Cruise Line Holdings Ltd. Quote
What’s Shaping NCLH’s Q3 Results?
Norwegian Cruise’s third-quarter performance is likely to have been aided by robust consumer demand, with high advance ticket sales and strong pricing, particularly for popular destinations like Alaska and Europe. Guests' continued interest in shore excursions and amenities, including specialty restaurants and communication services, enhanced by the ongoing implementation of Starlink across the fleet, bode well.
Continued strong onboard revenues, especially from shore excursions, specialty dining and onboard amenities, are expected to have significantly contributed to overall revenues. Alongside the aforementioned tailwinds, NCLH’s fleet expansion initiatives, and focus on innovation and digital investments are likely to have fostered growth trends.
For the quarter under review, our model predicts passenger ticket revenues, and onboard and other revenues to increase 8.9% to $1,888.7 million and 6.6% to $855.7 million, respectively, on a year-over-year basis.
The bottom line is expected to have increased year over year on the back of Norwegian Cruise’s continuous focus on cost reductions and efficiencies, accompanied by margin enhancement initiatives. Leverage from top-line growth is expected to have acted as another tailwind. Our model predicts year-over-year adjusted EBITA growth of 15.7% to $870.4 million.
Price Performance & Valuation
NCLH shares have surged 76% in the past year, outperforming the Zacks Leisure and Recreation Services industry, and the S&P 500. Other major industry players have also registered notable gains in the same time frame, with Carnival Corporation & plc CCL rallying 92.3%, Royal Caribbean Cruises Ltd. RCL surging 137% and OneSpaWorld Holdings Limited OSW jumping 69%.
Price Performance
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From a valuation perspective, NCLH is trading relatively cheaper. The company has a forward 12-month price-to-earnings of 12.8X, below the industry average.
P/E (F12M)
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Investment Considerations
Investors should consider buying Norwegian Cruise ahead of its third-quarter earnings results due to strong momentum in consumer demand, high occupancy and a favorable pricing environment. Robust bookings and onboard revenues from popular destinations like Alaska and Europe, coupled with increased passenger spending on excursions and premium services enhanced by Starlink connectivity, bode well.
The company’s ongoing cost-reduction and margin improvement strategies position it well for profitability, with expected year-over-year adjusted EBITDA growth in third-quarter 2024. A Federal Reserve rate cut could further reduce NCLH's borrowing costs, allowing for more financial flexibility as it invests in operations.
Despite significant stock price increases over the past year, NCLH remains attractively valued, trading at a discount, making it a compelling investment as it approaches its third-quarter 2024 earnings announcement.
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Carnival Corporation (CCL) : Free Stock Analysis Report
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
OneSpaWorld Holdings Limited (OSW) : 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.
