How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Royal Caribbean (RCL) ten years ago? It may not have been easy to hold on to RCL for all that time, but if you did, how much would your investment be worth today?
Royal Caribbean's Business In-Depth
With that in mind, let's take a look at Royal Caribbean's main business drivers.
Based in Miami and incorporated in 1985, Royal Caribbean Cruises is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, it has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises.
The company’s cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments. These brands operate 64 ships. The ships operate on a selection of diverse itineraries worldwide that include roughly 1,000 destinations on all seven continents.
The company reports revenues under the following segments — Passenger ticket revenues (69.8% of total revenues in 2024) and Onboard and other revenues (30.2%).
As of Dec. 31, 2024, the company had $5.5 billion in customer deposits compared with $5.31 billion in the prior-year period. As of Dec. 31, 2024, Royal Caribbean reported cash and cash equivalents of $388 million compared with $497 million in 2023-end. As of the end of the fourth quarter of 2024, long-term debt decreased to $18.47 billion from $19.73 billion as of 2023-end. The current portion of long-term debt at the end of the quarter was $1.6 billion, down from $1.72 billion in 2023-end.
In the third quarter of 2022, the company unveiled a three-year financial performance initiative — the Trifecta Program — thereby articulating longer-term financial objectives. The program emphasizes financial coordinates, including Adjusted EBITDA per APCD, Adjusted EPS and ROIC. During second-quarter 2024, the company achieved its Trifecta financial goals (18 months ahead of schedule), strengthened its balance sheet and reinstated dividends, enhancing shareholders’ value. The company is focused on driving strong shareholder returns by delivering a lifetime of vacations and capturing a larger share of the rapidly growing $1.9-trillion global vacation market. It focuses on disciplined expansion, moderate yield growth, and cost control to achieve the same.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Royal Caribbean ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in February 2015 would be worth $3,442.17, or a 244.22% gain, as of February 14, 2025. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 191.61% and gold's return of 130.36% over the same time frame.
Analysts are forecasting more upside for RCL too.
Shares of Royal Caribbean have outperformed the industry in the past six months. The company reported fourth-quarter 2024 results, with earnings beating the Zacks Consensus Estimate while the revenues missed the same. Notably, both top and bottom lines increased on a year-over-year basis. It is benefiting from strong cruising demand from new and loyal guests and robust booking trends. Also, strength in consumer spending onboard and pre-cruise purchases bodes well. The company emphasized investing in a modern digital travel platform to streamline the vacation booking process for its customers and expand wallet share. In the first quarter of 2025, management estimates EPS to be in the band of $2.43-$2.53. However, increased fuel costs, foreign currency risks and global macro headwinds are concerning for the company’s prospects.
The stock is up 11.49% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 7 higher, for fiscal 2025. The consensus estimate has moved up as well.Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpRoyal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
