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Here's Why Norwegian Cruise Line (NCLH) Fell More Than Broader Market

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In the latest close session, Norwegian Cruise Line (NCLH - Free Report) was down 3.1% at $22.85. This change lagged the S&P 500's 0.63% loss on the day. At the same time, the Dow lost 0.65%, and the tech-heavy Nasdaq lost 0.47%.

Shares of the cruise operator have depreciated by 7.09% over the course of the past month, underperforming the Consumer Discretionary sector's loss of 3.5%, and the S&P 500's gain of 0.92%.

Investors will be eagerly watching for the performance of Norwegian Cruise Line in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.16, signifying a 17.17% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $3.02 billion, indicating a 7.5% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.09 per share and revenue of $10.05 billion, which would represent changes of +14.84% and +6.02%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Norwegian Cruise Line. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 2.98% rise in the Zacks Consensus EPS estimate. Norwegian Cruise Line presently features a Zacks Rank of #1 (Strong Buy).

From a valuation perspective, Norwegian Cruise Line is currently exchanging hands at a Forward P/E ratio of 11.28. This indicates a discount in contrast to its industry's Forward P/E of 20.25.

It's also important to note that NCLH currently trades at a PEG ratio of 0.92. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Leisure and Recreation Services industry was having an average PEG ratio of 1.23.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 61, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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