Norwegian Cruise Line (NCLH) Upgraded From Hold to Buy

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.  TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock.  Click here to learn more.

NEW YORK (TheStreet) -- Norwegian Cruise Line  (NCLH) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B-.  TheStreet Ratings Team has this to say about their recommendation:

"We rate NORWEGIAN CRUISE LINE HLDGS (NCLH) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 13.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • 43.63% is the gross profit margin for NORWEGIAN CRUISE LINE HLDGS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.16% is above that of the industry average.
  • Net operating cash flow has increased to $181.62 million or 24.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.38%.
  • NORWEGIAN CRUISE LINE HLDGS has improved earnings per share by 18.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NORWEGIAN CRUISE LINE HLDGS reported lower earnings of $0.47 versus $0.85 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $0.47).
  • You can view the full analysis from the report here: NCLH Ratings Report

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