Royal Caribbean Cruises Ltd.
Royal Caribbean Cruises Ltd. Fundamental Analysis
Royal Caribbean Cruises Ltd. (RCL) shows strong financial fundamentals with a PE ratio of 20.12, profit margin of 23.82%, and ROE of 45.87%. The company generates $18.0B in annual revenue with strong year-over-year growth of 18.60%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 61.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze RCL's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRCL demonstrates superior asset utilization.
Valuation Score
ModerateRCL shows balanced valuation metrics.
Growth Score
ExcellentRCL delivers strong and consistent growth momentum.
Financial Health Score
WeakRCL carries high financial risk with limited liquidity.
Profitability Score
ExcellentRCL achieves industry-leading margins.
Key Financial Metrics
Is RCL Expensive or Cheap?
P/E Ratio
RCL trades at 20.12 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RCL's PEG of 3.96 indicates potential overvaluation.
Price to Book
The market values Royal Caribbean Cruises Ltd. at 8.57 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.37 times EBITDA. This is generally considered low.
How Well Does RCL Make Money?
Net Profit Margin
For every $100 in sales, Royal Caribbean Cruises Ltd. keeps $23.82 as profit after all expenses.
Operating Margin
Core operations generate 27.37 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $45.87 in profit for every $100 of shareholder equity.
ROA
Royal Caribbean Cruises Ltd. generates $10.27 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Royal Caribbean Cruises Ltd. generates strong operating cash flow of $6.51B, reflecting robust business health.
Free Cash Flow
Royal Caribbean Cruises Ltd. produces free cash flow of $1.24B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.56 in free cash annually.
FCF Yield
RCL converts 1.43% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.12
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.96
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.82
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.26
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.18
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.46
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How RCL Stacks Against Its Sector Peers
| Metric | RCL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.12 | 24.93 | Better (Cheaper) |
| ROE | 45.87% | 1149.00% | Weak |
| Net Margin | 23.82% | 749.00% | Weak |
| Debt/Equity | 2.26 | 0.76 | Weak (High Leverage) |
| Current Ratio | 0.18 | 9.21 | Weak Liquidity |
| ROA | 10.27% | 1274.00% | Weak |
RCL outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Royal Caribbean Cruises Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
20.78%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
22.85%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
13.66%
Industry Style: Cyclical, Growth, Discretionary
High Growth