Royal Caribbean Cruises Ltd

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RCL : NYSE : Services
$69.75 | %
Today's Range: 69.20 - 70.46
Avg. Daily Volume: 2,374,300
08/26/16 - 4:02 PM ET

Financial Analysis


ROYAL CARIBBEAN CRUISES LTD's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. ROYAL CARIBBEAN CRUISES LTD has very weak liquidity. Currently, the Quick Ratio is 0.09 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 2.09% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2105.262058.32
EBITDA ($mil)508.32467.77
EBIT ($mil)286.7261.3
Net Income ($mil)229.91184.97


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)175.16159.36
Total Assets ($mil)22471.4921395.19
Total Debt ($mil)10048.918780.91
Equity ($mil)8145.678320.24


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin37.7536.04
EBITDA Margin24.1422.72
Operating Margin13.6212.69
Sales Turnover0.380.38
Return on Assets3.43.88
Return on Equity9.389.97
Debt Q2 FY16 Q2 FY15
Current Ratio0.20.19
Debt/Capital0.550.51
Interest Expense78.7576.62
Interest Coverage3.643.41


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)215.25219.93
Div / share0.380.3
EPS1.060.84
Book value / share37.8437.83
Institutional Own % n/a n/a
Avg Daily Volume2336694.02822376.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 31.03 for the Hotels, Restaurants & Leisure industry and a discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 1.85 indicates a discount versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 40.41. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, ROYAL CARIBBEAN CRUISES LTD proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
RCL 20.09 Peers 31.03   RCL 6.94 Peers 14.46

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

RCL is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

RCL is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
RCL 10.10 Peers 25.37   RCL 0.20 Peers 2.85

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

RCL is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

RCL trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
RCL 1.85 Peers 40.41   RCL -6.19 Peers 31.54

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

RCL is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, RCL is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
RCL 1.79 Peers 2.88   RCL 4.55 Peers 5.70

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

RCL is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

RCL trails its peers on the basis of sales growth

 

 

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