Why Norwegian Cruise Line (NCLH) Dipped More Than Broader Market Today

Norwegian Cruise Line (NCLH) closed at $19.85 in the latest trading session, marking a -1.83% move from the prior day. This move lagged the S&P 500's daily loss of 1.74%. Meanwhile, the Dow lost 1.01%, and the Nasdaq, a tech-heavy index, lost 2.38%.

Shares of the cruise operator have depreciated by 15.08% over the course of the past month, underperforming the Consumer Discretionary sector's loss of 3.73%, and the S&P 500's loss of 4.99%.

The upcoming earnings release of Norwegian Cruise Line will be of great interest to investors. The company is predicted to post an EPS of $0.16, indicating a 128.57% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.34 billion, showing a 10.06% escalation compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.35 per share and a revenue of $10.56 billion, representing changes of +11.37% and +7.49%, respectively, from the prior year.

Any recent changes to analyst estimates for Norwegian Cruise Line should also be noted by investors. These revisions help to show the ever-changing nature of near-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 7.76% downward. At present, Norwegian Cruise Line boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Norwegian Cruise Line currently has a Forward P/E ratio of 8.62. This represents a discount compared to its industry average Forward P/E of 15.98.

Investors should also note that NCLH has a PEG ratio of 0.52 right now. 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. The average PEG ratio for the Leisure and Recreation Services industry stood at 1.3 at the close of the market yesterday.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 148, finds itself in the bottom 40% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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