Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH)

Sector: Consumer Cyclical Industry: Travel Services CIK: 0001513761
Market Cap 10.73 Bn
P/B 4.89
P/E 16.17
P/S 1.11
ROIC (Qtr) 9.59
Div Yield % 0.00
Rev 1y % (Qtr) 4.69
Total Debt (Qtr) 14.52 Bn
Debt/Equity (Qtr) 6.62
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About

Norwegian Cruise Line Holdings Ltd. (NCLH) is a leading player in the global cruise industry, known by its stock symbol NCLH. The company's business revolves around providing exceptional vacation experiences to a diverse range of travelers, from budget-conscious individuals to luxury-seekers. With a fleet of 32 ships, NCLH offers itineraries to worldwide destinations, catering to a global customer base significantly present in North America, Europe, and Asia. NCLH operates under three distinct brands. Norwegian Cruise Line, the company's flagship...

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Investment thesis

Bull case

  • Operating cash flow of 2.03B provides strong 22.35x coverage of stock compensation 90.81M, indicating sustainable incentive practices.
  • Operating cash flow of 2.03B provides strong 13.05x coverage of inventory 155.51M, indicating efficient inventory management.
  • Tangible assets of 21.58B provide robust 5.04x coverage of other current liabilities 4.28B, indicating strong asset backing.
  • Operating cash flow of 2.03B fully covers other non-current liabilities 1.03B by 1.98x, showing strong long-term stability.
  • Cash reserves of 166.80M exceed inventory value of 155.51M by 1.07x, indicating strong liquidity and inventory management.

Bear case

  • Operating cash flow of 2.03B barely covers its investment activities of (3.08B), with a coverage ratio of -0.66, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.03B provides minimal -15.26x coverage of tax expenses of (132.98M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (1.04B) provides weak coverage of capital expenditures of 3.07B, with a -0.34 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of (1.04B) represents just -1.06x of debt issuance 973.26M, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating earnings of 1.49B show weak coverage of depreciation charges of 1.03B, with a 1.44 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Travel Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BKNG Booking Holdings Inc. 176.65 Bn 51.94 12.17 17.53 Bn
2 RCL Royal Caribbean Cruises Ltd 87.73 Bn 20.55 4.89 22.04 Bn
3 ABNB Airbnb, Inc. 76.08 Bn 30.30 6.22 2.00 Bn
4 CCL Carnival Corp 42.95 Bn 15.56 1.61 27.99 Bn
5 TCOM Trip.com Group Ltd 36.86 Bn 8.42 4.39 4.49 Bn
6 VIK Viking Holdings Ltd 34.07 Bn 35.81 5.56 5.65 Bn
7 EXPE Expedia Group, Inc. 25.13 Bn 19.42 1.71 6.42 Bn
8 NCLH Norwegian Cruise Line Holdings Ltd. 10.73 Bn 16.17 1.11 14.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.09 1.63
EV to Cash from Ops. EV/CFO 11.98 25.22
EV to Debt EV to Debt 1.67 0.32
EV to EBIT EV/EBIT 16.32 8.12
EV to EBITDA EV/EBITDA 9.27 8.69
EV to Free Cash Flow [EV/FCF] EV/FCF -23.48 16.59
EV to Market Cap EV to Market Cap 2.27 0.91
EV to Revenue EV/Rev 2.51 3.15
Price to Book Value [P/B] P/B 4.89 -22.19
Price to Earnings [P/E] P/E 16.17 47.79
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -2.21
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 29.35
Dividend per Basic Share Div per Share (Qtr) 0.00 2.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.02
Interest Coverage Int. cover (Qtr) 1.55 2.13
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -89.79 -26.27
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -49.84 879.96
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 17.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 42.41 221.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.32 -4.91
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.31 195.76
EBT Growth (1y) % EBT 1y % (Qtr) -4.73 69.12
EPS Growth (1y) % EPS 1y % (Qtr) 19.20 153.49
FCF Growth (1y) % FCF 1y % (Qtr) -451.75 40.03
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.37 101.51
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.44 0.39
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.03 0.43
Current Ratio Curr Ratio (Qtr) 0.20 1.11
Debt to Equity Ratio Debt/Equity (Qtr) 6.62 -5.94
Interest Cover Ratio Int Coverage (Qtr) 1.55 2.13
Times Interest Earned Times Interest Earned (Qtr) 1.55 2.13
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 26.00 -25.59
EBIT Margin % EBIT Margin % (Qtr) 15.37 -3.90
EBT Margin % EBT Margin % (Qtr) 5.47 -33.52
Gross Margin % Gross Margin % (Qtr) 42.00 52.98
Net Profit Margin % Net Margin % (Qtr) 6.80 -35.95